IEA releases 60M barrel from strategic reserves

US, IEA Agree to Release 60 Million Barrels From Oil Stockpiles Amid Ukraine’s Crisis
The US and other major oil-consuming nations said Tuesday they willl release 60 million barrels of oil from their emergency stockpiles, sending a jolt of new crude supplies into the market amid a price surge caused by the Ukraine crisis.

The move by members of the International Energy Agency, a Paris-based group that includes the US, Japan and much of Europe, represents another coordinated effort to counter Russia amid its invasion of Ukraine. The coordinated drawdown is the fourth in the 47-year history of the IEA.

The IEA said it wanted to send “a unified and strong message to global oil markets that there will be no shortfall in supplies as a result of Russia’s invasion of Ukraine.”

The IEA said it supported sanctions imposed by the international community on Russia but also worried about tight global oil markets, heightened price volatility and commercial inventories that are at their lowest level since 2014.

The US and other IEA countries are hoping to bring down oil prices, which traded Tuesday above $100 a barrel at eight-year highs. Prices rose after the IEA announcement to almost $106 a barrel, or up 8.1% on the day.

Lower oil prices would reduce revenue for Russia, one of the world’s largest oil producers, and potentially give the US and Europe more room to target Moscow’s energy industry, which has so far been off limits because of the pain energy sanctions would cause in the West.

The IEA’s petroleum release was smaller than initial considerations of 70 million barrels and will include 30 million barrels from the US.

This will be the second oil-stockpile release in three months. The Biden administration already decided to unleash 50 million barrels of oil from US reserves in November, while China and others also tapped their own inventories.

The IEA, which didn’t join the US in the last release because some European countries felt it wasn’t justified, will now oversee the effort.

Russia’s assault on Ukraine helped push the price of oil to over $100 a barrel for the first time since 2014.