IEA states still discussing coordinated oil release

Member states of the International Energy Agency (IEA) were still discussing how much oil they would together release from storage to cool markets, three sources told Reuters, adding that an announcement was expected in coming days.

The silence on how much oil from storage would be tapped by some of the world’s top oil-consuming countries was adding to confusion in a market already jangled by sanctions and buyer aversion to Russian oil in the wake of the invasion of Ukraine.

A grouping of 31 mostly industrialized countries but not Russia, the IEA said on Friday it had agreed to a coordinated release of oil but specified no volumes, a day after the White House said it would release 180 million barrels from its storage – the biggest in its history.

Oil prices were down nearly $6 since news of the U.S. release plan and Brent crude was trading at about $109 a barrel on Tuesday.

Adding to the uncertainty, one government source from an IEA member country said the oil contributions of member states would be considered a part of the 180 million barrels already announced by the United States.

Another source, who said the IEA was reaching out bilaterally to each country to discuss their oil outlays, said the issue of whether their releases would be a part of or an addition to the 180 million barrels remained unclear.

The IEA did not immediately respond to a Reuters request for comment.

U.S. President Joe Biden said on Thursday that U.S. allies and partners could release an additional 30 million to 50 million barrels.

COORDINATED RELEASE

The U.S. Department of Energy announced on Friday a timetable for the release of that volume solely from the U.S. Strategic Petroleum Reserve (SPR) starting in May.

The announcement by the U.S.-allied IEA countries on Friday is their second coordinated release in a month and would be the fifth in the agency’s history to confront oil market outages.

The U.S. and IEA states’ previous release was announced all at once, with the United States supplying about half of the more than 60 million barrel pledge.

That amount made up about 3% of the more than 2 billion barrels of public reserves and oil then held under obligations with industry belonging to member states.

Of that total, Japan and the United States hold more than half and European states – which are heavily dependent on Russian energy – nearly all of the remainder.

A Reuters analysis of IEA data showed government-controlled oil stocks among member states was at its lowest since 2005 even before the March 1 release, while U.S. SPR levels have dropped to their lowest since 2002, government data showed.

Global oil supply disruptions are approaching 5-6 million barrels per day (bpd), according to Reuters’ calculations, as sanctions, conflicts and infrastructure failures bite.