60 million barrels to be released to combat soaring prices following the war in Ukraine
The International Energy Agency (IEA) has announced that its 31 member nations will release a total of 60 million barrels of oil from emergency reserves to tackle surging global energy prices exacerbated by Russia’s invasion of Ukraine. This action adds to previous commitments from the United States and represents a significant effort to stabilise markets.
According to the IEA, the new release will contribute to a total of 120 million barrels entering the market over the next six months—the largest coordinated release in the organisation’s history. Of this, approximately half will come from the United States as part of President Joe Biden’s strategic petroleum reserve drawdown, which was announced last week.
This latest measure follows an earlier pledge last month by IEA members to release 62.7 million barrels to address global supply shortages. Fatih Birol, IEA Executive Director, highlighted the urgency of these steps, stating: “Events in Ukraine are becoming more distressing by the day, and action by the IEA at this time is needed to relieve some of the strains in energy markets.”
Energy markets have faced severe disruptions as demand rebounded following the COVID-19 pandemic, outpacing supply and pushing prices higher. Inflation, fuelled by rising energy costs, has intensified further due to uncertainties around Russian oil and gas supplies and Western sanctions on Moscow.
Russia, as the third-largest oil-producing nation globally, sends 60% of its exports to Europe and 20% to China. In response to the war, the United States has banned all Russian energy supplies, while the United Kingdom has pledged to phase out Russian oil and coal by the end of the year and cease natural gas imports “as soon as possible.” Meanwhile, the European Union is preparing to approve a ban on Russian coal—the first step against Russian energy sources that are vital for electricity generation, industrial use, and transportation.
Currently, IEA member countries collectively hold around 1.5 billion barrels of oil in their public reserves, which will be utilised to address market volatility and the ongoing crisis.
