The International Energy Agency (IEA) has approved the historic release of 400 million barrels of oil to address shortages caused by supply disruptions amid rising tensions in the Middle East.
The decision comes after Iran announced the closure of the Strait of Hormuz, a critical passage through which much of the world’s oil supply passes, following US-Israeli joint military strikes on Iran.
The announcement, made Wednesday, did not set a timeline for the release of oil stocks. However, it added that the oil would be released in due course depending on the circumstances of the 32 member states.
For context, the IEA was formed in 1974 to maintain global energy security in response to the Arab oil embargo of 1973. It consists primarily of advanced economies from Europe, North America, and Northeast Asia.
Speaking at the organization’s headquarters in Paris, IEA Executive Director Fatih Birol said that given the significant impact of the conflict in the Middle East on global oil, gas markets, energy security and the global economy of oil, “I can now announce that IEA countries have unanimously decided to launch the largest ever release of emergency oil stocks in the history of our agency.”
The agency holds over 1.2 billion barrels of oil in public emergency reserves, along with about 600 million barrels of industrial stocks held under government obligations
Birol said the release would help mitigate the immediate effects of the closure of the Strait of Hormuz.
The normal traffic flow from the strait is necessary to bring the oil and gas flows back to the global market.
