Member states of the International Energy Agency (IEA) may release part of the strategic oil reserves to the market to contain a sharp rise in prices during the US-Israeli war against Iran. A decision on this proposal is expected on March 11.
This is reported by the Wall Street Journal, citing officials familiar with the situation.
An emergency meeting of energy officials from the 32 member states of the International Energy Agency was held on March 10. It discussed the possibility of using strategic oil reserves.
How much oil can be released to the market
According to sources, the proposed volume of oil that can be released to the market exceeds 182 million barrels. This is how much IEA countries released in 2022 after russia's full-scale invasion of Ukraine.
The decision requires unanimous support from all member states of the agency. The objection of even one country could delay the implementation of the plan.
What are the volumes of strategic oil reserves of the agency's countries?
The Executive Director of the IEA, Fatih Birol, reported that the agency's countries have about 1.2 billion barrels in state reserves, and another approximately 600 million barrels are stored in mandatory commercial reserves.
According to him, these volumes can provide about 124 days of supplies in the event of a disruption of supplies from the Persian Gulf region.
Why the possible closure of the Strait of Hormuz affects oil prices
The closure of the Strait of Hormuz sharply increases world oil prices, because a significant part of global energy supplies passes through this sea corridor.
The Strait of Hormuz connects the Persian Gulf with the Indian Ocean. Oil from the region's key exporters - Saudi Arabia, Iraq, Kuwait, the United Arab Emirates and Iran - is transported through it. According to energy analysts, about a fifth of the world's seaborne oil exports pass through this route.
Recall that US President Donald Trump said he would demand the immediate removal of mines from the Strait of Hormuz if reports of Iran planting them are confirmed. He warned Iran of "unprecedented military consequences" if the mines were confirmed.
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