Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

IEA Will Deploy Emergency Oil Stockpiles to Ease Soaring Prices

Commodities Mar 01, 2022 10:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. IEA Will Deploy Emergency Oil Stockpiles to Ease Soaring Prices

(Bloomberg) -- The U.S. and other major economies have agreed on a coordinated release of oil stockpiles after Russia’s invasion of Ukraine pushed crude above $100 a barrel, according to people familiar with the matter. 

The International Energy Agency, which represents key industrialized consumers including Japan and Germany, has agreed to deploy 60 million barrels from stockpiles around the world, the people said. That will mark the second release from American crude reserves within a few months as soaring fuel costs become a growing political problem for President Joe Biden. 

The U.S. Energy Department declined to comment. The IEA couldn’t immediately be reached for comment. 

Crude prices shot above $105 a barrel in London for the first time since 2014 on fears that oil and gas supplies from energy giant Russia could be disrupted, either by the conflict in Ukraine or retaliatory western sanctions. The rally is exacerbating an inflationary surge for energy-consuming nations, threatening the economic recovery and worsening a cost-of-living crisis for millions.

Russia’s aggression has spooked a market already tightened by a vigorous recovery in demand as the pandemic eases, and constraints on supply owing to under-investment and disruptions around the world. Trading giants Vitol Group and Trafigura Ltd. expect triple-digit prices to continue for a prolonged period. 

The IEA’s intervention comes after the OPEC+ coalition, which is led by Saudi Arabia and Russia, disregarded encouragement from Biden last year to increase supplies more quickly. The group meets again on March 2 to discuss its production plans for April. 

Riyadh has signaled that it doesn’t consider markets to be tight enough to speed up the restoration of production that the Organization of Petroleum Exporting Countries and its partners halted during the pandemic. Many other nations in the 23-member alliance couldn’t increase supplies any faster even if they chose to, owing to lack of investment and instability.

Saudi Arabia and its Gulf neighbors have enough idle reserves to bolster supplies if they chose to. Yet the kingdom has refused to fill in for fellow OPEC+ members who are struggling by tapping its spare capacity, contending that this would violate the spirit of the alliance’s agreement.

Surging gasoline prices are a particular risk for Biden, who faces midterm elections with slipping approval ratings. He already failed to tame fuel costs with release of crude from emergency stocks announced last year. Traders said that initiative was undermined by its limited scope, with most of the barrels being offered on condition of later return. 

It’s the first time the IEA has made a synchronised release of oil stocks since the Libyan civil war in 2011. There are echoes of that crisis in today’s events: It was Riyadh’s reluctance to open the taps a decade ago to offset the disruption caused by the uprising against dictator Moammar Qaddafi that prompted the agency into action.  

Previous deployments came during the 1991 Gulf War, and the onslaught of hurricanes Rita and Katrina in 2005, making this just the fourth such intervention in the IEA’s five-decade history. 

The IEA’s 30 members, drawn from the Organization for Economic Cooperation and Development, include the U.S., Japan, Germany and France.

©2022 Bloomberg L.P.

IEA Will Deploy Emergency Oil Stockpiles to Ease Soaring Prices
 

Related Articles

Gold Treads Water at Mid-$1,800 as All Eyes on Fed 
Gold Treads Water at Mid-$1,800 as All Eyes on Fed  By Investing.com - Jun 24, 2022 5

By Barani Krishnan Investing.com -- Bulls in gold logged a second weekly loss as the yellow metal treaded water at mid-$1,800 levels amid a keen watch on the Federal Reserve’s next...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Ahsan Noorani
Ahsan Noorani Mar 01, 2022 11:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Let Iran open their taps, everything will grt fixed
Robert Ivan
Robert Ivan Mar 01, 2022 11:36AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Maybe Biden should move towards energy independence by easing restrictions on american oil instead of shutting it down, crazy talk I know right?
Teña Kenneth
Teña Kenneth Mar 01, 2022 11:35AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email