IEA ready to release more oil reserves if necessary

The International Energy Agency (IEA) disclosed that its member countries are prepared to release additional oil from their strategic reserves should the need arise, with a particular emphasis on diesel due to its tight supply. IEA director Fatih Birol announced this stance on Wednesday. The agency reported that member states still possess significant reserves of crude oil and refined products and are ready to deploy more of these stocks to the market on an as-needed basis.

In response to global energy supply issues stemming from the US-Iran war, G7 nations, in coordination with the IEA, agreed to release 100 million barrels of diesel and crude oil immediately. Although crude oil shipments through the Strait of Hormuz have recently increased, refinery damage in the region and Russia has resulted in shortages of certain refined products, including diesel.

Birol emphasized during his statement that IEA members also agreed on prioritizing the release of diesel stocks, where feasible, owing to the existing tightness in diesel markets.

To date, IEA member countries have released 325 million barrels of oil and oil-derivative products from their strategic reserves, amounting to half of the 400 million barrels pledged in March. As of now, these member countries retain substantial levels of publicly held emergency oil stocks, equivalent to approximately 1.1 billion barrels, including over 200 million barrels of diesel.

Despite concerns surrounding oil reserve levels, Saudi Aramco's CEO, Amin Nasser, cautioned against relying solely on headline figures for reserves, highlighting that only less than 10% of the reported reserves are readily available. Nasser pointed out that a considerable portion of the reserves cited by countries is necessary to maintain the operational functionality of infrastructure.