The International Energy Agency (IEA) has authorized the historic release of 400 million barrels of oil to address shortages caused by supply disruptions amid escalating 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 joint US-Israeli military strikes against Iran.
The announcement, made Wednesday, did not set a timetable for the release of oil reserves. However, he added that the oil would be released at the appropriate time 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 considering the significant impacts of the conflict in the Middle East on global oil and gas markets, energy security and the global oil economy, “I can now announce that IEA countries have unanimously decided to launch the largest release of emergency oil reserves in the history of our agency.”
The agency has more than 1.2 billion barrels of oil in public emergency reserves, along with about 600 million barrels of industrial reserves held under government obligations.
Birol said the release would help mitigate the immediate effects of the closure of the Strait of Hormuz.
The normal flow of traffic from the Strait is needed to return oil and gas flows to the global market.
