【Iran Crisis】IEA member countries agree to release 400 million barrels of emergency oil reserves, with the United States releasing 170 million barrels, Japan 80 million barrels, South Korea 22.46 million barrels, and the United Kingdom 13.5 million barrels

The International Energy Agency (IEA) issued a statement stating that its 32 member countries unanimously agreed on Wednesday (the 11th) to release 400 million barrels of oil from emergency reserves, the largest ever, to address the market turmoil caused by the Middle East war. The emergency reserves will be released at appropriate times that suit each member country’s circumstances, and some members will also take additional emergency measures to supplement the release.

Additionally, U.S. Energy Secretary Chris Liddell announced in a statement that 172 million barrels will be released from the Strategic Petroleum Reserve starting next week. Liddell said that, according to the planned release rate, this process will take approximately 120 days to complete.

Japan announced it will release 80 million barrels, South Korea will release 22.46 million barrels, and the UK will release 13.5 million barrels.

Prior to the IEA announcement, Japan announced that it would start releasing about 80 million barrels of oil reserves as early as next Monday (the 16th). Japanese Prime Minister Sanae Takaichi stated that oil tankers still cannot pass through the Strait of Hormuz, and Japan’s crude oil imports are expected to drop significantly by the end of this month. Japan relies heavily on the Middle East and will be severely affected. Therefore, Japan had already made an official decision before the IEA’s international reserve release, to start releasing reserves as early as next Monday (the 16th). This will involve releasing an amount of oil equivalent to Japan’s 15 days of consumption from private reserves, and an amount equivalent to one month of consumption from national reserves.

Takaichi also mentioned that given the uncertain outlook of the Middle East situation, the government will continue to flexibly explore ways to provide support in the future. The government will utilize existing funds previously set aside to prevent fuel price hikes, aiming to keep gasoline prices around 170 yen per liter.

Germany also announced it will release part of its oil reserves, planning to contribute a total of 2.4 million tons of oil, though no specific timing was provided.

Currently, IEA member countries hold 1.2 billion barrels of public emergency oil reserves

The IEA statement quoted Executive Director Fatih Birol, saying that the crude oil market is facing unprecedented challenges, and he is very pleased that IEA member countries are taking an unprecedented collective emergency action. Since the oil market is global, responding to major emergencies requires global measures.

IEA member countries currently hold 1.2 billion barrels of public emergency oil reserves, with an additional 600 million barrels of industry reserves held mandatorily by governments. This coordinated release of reserves is the sixth since the IEA’s establishment in 1974. Previously, the IEA has taken collective action in 1991, 2005, 2011, and twice in 2022.

French President Emmanuel Macron hosted a virtual G7 leaders’ summit at 10 p.m. Hong Kong time to discuss the Iran crisis and rising energy prices. Earlier, G7 energy ministers issued a statement saying they are prepared to coordinate with the IEA to take “all necessary measures” to respond to the oil price surge caused by the Middle East war. The statement said, “In principle, we support taking proactive measures to address the current situation, including the use of strategic reserves.” Reports indicate that the IEA has proposed releasing about 300 to 400 million barrels of emergency oil reserves to help lower soaring oil prices.

The statement also said, “We are working closely with the IEA, monitoring energy market trends, and coordinating within the G7 and with our international partners, IEA member countries, and others.”