Mar 1, 2022 - World

IEA countries agree to release 60 million barrels of oil

Crude oil pipelines stand at the U.S. Department of Energy's Bryan Mound Strategic Petroleum Reserve in Freeport, Texas. Photo: Luke Sharrett/Bloomberg via Getty Images

The International Energy Agency said Tuesday that member countries have agreed to release 60 million barrels of oil to help volatility in global oil markets set off by Russia's invasion of Ukraine.

Why it matters: Oil prices, which were already increasing before Russia's invasion as the demand revival from the pandemic tightened markets, have recently surged to over $100 a barrel in response to the war.

  • The IEA condemned Russia's "appalling and unprovoked violation of Ukraine’s sovereignty and territorial integrity."

What they're saying: U.S. Secretary of Energy Jennifer Granholm said after an IEA ministerial meeting Tuesday that 30 million barrels of the released oil will come from the Strategic Petroleum Reserve and that the U.S. is "prepared to take additional measures if conditions warrant."

  • "We will continue advancing ongoing efforts to accelerate Europe’s diversification of energy supplies away from Russia and to secure the world from Putin’s attempts to weaponize energy supplies," Granholm added.
  • White House press secretary Jen Psaki said the "announcement is another example of partners around the world condemning Russia’s unprovoked and unjustified invasion of Ukraine and working together to address the impact of President Putin’s war of choice."
  • "It is heartening to see how quickly the global community has united to condemn Russia’s actions and respond decisively," IEA executive director Fatih Birol said in a statement.
  • "I am pleased that the IEA has also come together today to take action. The situation in energy markets is very serious and demands our full attention. Global energy security is under threat, putting the world economy at risk during a fragile stage of the recovery," he added.

The big picture: Vladimir Putin's decision to invade Ukraine has also led to major shakeups among Western companies involved in the country's oil industry, as both BP and Shell have announced they intend to divest from Russian companies and energy projects.

  • Western sanctions have thus far avoided taking direct aim at Russia's oil and gas sectors directly, though the sanctions on Russian banks could disrupt the country's energy exports.
  • The rest of the released oil will come from IEA members in Europe and Asia, according to Bloomberg.

Thought bubble, via Axios' Ben Geman: While the global oil market is roughly 100 million barrels per day, even the addition of 2 million barrels a day on a temporary basis is likely to at least help slow the upward price momentum.

  • IEA noted that the "initial" 60 million barrel release is 4% of members' combined stockpiles and would represent 2 million barrels per day for 30 days. Russia currently exports about 5 million barrels daily, with over half going to Europe, IEA said.

Go deeper:

Go deeper