IEA wants to release crude oil reserves because of the Ukraine war

Created: 03/01/2022, 19:09

Fuel prices are rising sharply as a result of the war in Ukraine.

© Daniel Bockwoldt/dpa

Oil prices have risen sharply as a result of the war in Ukraine.

Leading industrialized countries now want to go to the reserves to protect consumers from a price explosion.

Paris - The International Energy Agency (IEA) wants to mitigate the consequences of Russia's war against Ukraine on the markets by releasing crude oil reserves.

In total, the agency's 31 member countries will release 60 million barrels of crude oil, according to a statement published in Paris on Tuesday.

This is intended to alleviate supply bottlenecks as a result of the war.

Oil prices have recently risen significantly.

The IEA is an interest group of industrialized countries.

IEA member ministers at an extraordinary meeting expressed concern over the impact of Russia's "egregious actions" on energy security.

Support the international community's sanctions against Russia.

Strong emergency reserves

According to the information, the IEA members have emergency reserves of 1.5 billion barrels.

Only four percent are released.

Initially, oil prices hardly reacted to the decision.

It is only the fourth time reserves have been released in a coordinated manner - most recently in 1991, during the war in Iraq.

On the sidelines of a visit to Washington, Vice Chancellor Robert Habeck pointed out that the national oil reserve in Germany was created to ensure security of supply "and that it was not created to send out price signals." Nevertheless, high prices also have a negative impact on the economy , so the question of countermeasures is justified.

However, only “small parts” of the national oil reserve could be used, Habeck said.

"I see above all that this reserve is there for us in Germany to ensure that - should a supply chain break - we have enough oil in the country."

Disruptions should be limited

White House spokeswoman Jen Psaki said as part of the IEA agreement, US President Joe Biden will authorize the Department of Energy to release 30 million barrels from the US strategic oil reserve.

We are ready to use any means available to limit disruptions to global energy supplies resulting from the attack on Ukraine ordered by Russian President Vladimir Putin.

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Psaki called the IEA decision "another example of partners around the world condemning Russia's unprovoked and unjustified invasion of Ukraine."

Biden made it clear from the start that all instruments were on the table to protect American companies and consumers, "including from rising prices at the pumps."

The US would continue its efforts to protect the world from Moscow using oil and gas as a weapon.

dpa