Kathmandu, 12 March: Aiming to mitigate the oil supply shortage in the global market caused by escalating tensions in the Middle East, the International Energy Agency (IEA) has decided to make 40 million barrels of crude oil available from its emergency reserves. The largest share of this release will come from the United States, which is set to contribute 172 million barrels out of the total 400 million.
According to the BBC, the 32 member countries of the IEA reached a unanimous decision to release the oil into the world market. Global oil supply has been disrupted following attacks in the Strait of Hormuz, a critical maritime route situated between Iran and the Gulf countries, amidst heightened tensions in the Middle East. This disruption has led to a sharp increase in oil prices.
IEA Executive Director Fatih Birol stated that such a step was necessary as the oil market is currently facing exceptional challenges. “The challenges in the oil market are unprecedented, so it is a positive development that member countries have taken this step,” he remarked. The IEA has indicated that the oil released from emergency stockpiles will be made available to the market over an appropriate period, tailored to the national circumstances of each member country.
The IEA member states currently hold more than 1.2 billion barrels of oil in emergency government reserves. Additionally, the agency notes that there are a further 600 million barrels of oil reserves held in the industry sector under government obligations.
**United States to Contribute 172 Million Barrels**
Under this decision, the United States will be the largest contributor, providing 172 million barrels of the total 400 million. The U.S. Department of Energy has announced that the release of oil from the Strategic Petroleum Reserve (SPR) will begin next week and will be delivered to the market over approximately 120 days.
According to the Department of Energy, the U.S. plans to replenish the reserve with 200 million barrels of oil within the next year. It has been claimed that this time, taxpayers will not bear the additional burden typically associated with the cost of refilling such reserves, although detailed information on how this will be achieved has not been made public.
As of March 6th, U.S. Energy Department data shows that the SPR holds approximately 415 million barrels of oil, against its total capacity of 700 million barrels.
