PARIS (AP) — The International Energy Agency agreed Wednesday to release the largest volume of emergency oil reserves in its history, in a bid to counter the effects on energy markets of the war in the Middle East.
Germany Oil Reserves
The Paris-based organization said it will make 400 million barrels of oil available from its members' emergency reserves. It's a larger stock than the 182.7 million barrels that were released in 2022 by the IEA's 32 member countries in response to Russia's full-scale invasion of Ukraine.
"Without sufficient routes to market and with no more available storage, Middle East oil producers have started to reduce production," IEA executive director Fatih Birol said. "And we have seen further attacks and damage to energy and energy-related infrastructure. Refinery operations have also been disrupted, with major implications for jet fuel and diesel supplies in particular."
IEA member countries currently hold over 1.2 billion barrels of public emergency oil stocks, with a further 600 million barrels of industry stocks held under government obligation.
In response to U.S. and Israeli strikes, Iran hasattacked commercial shipsacross the Persian Gulf, escalating a campaign of squeezing the oil-rich region asglobal energy concerns mount.
Iran has effectively stopped cargo traffic in the narrow Strait of Hormuz through which about a fifth of all oil is shipped from the Persian Gulf toward the Indian Ocean. It has alsotargeted oil fields and refineriesin Gulf Arab nations, aiming at generating enoughglobal economic painto pressure the United States and Israel to end their strikes.
Germany, Austria and Japan said earlier Wednesday they would release parts oftheir oil reservesfollowing an IEA request for members to release the record 400 million barrels to help temper energy price spikes due tothe Iran war.
Group of Seven energy ministers met Tuesday at IEA headquarters in Paris to look at ways to bring down prices. Birol said afterward that they discussed all available options, including making IEA emergency oil stocks available to the market.
The IEA reserves were established in 1974 following the Arab oil embargo.
"This is a major action aiming to alleviate the immediate impacts of the disruption in markets," Birol added. "But, to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz."
Birol said that 15 million barrels per day of crude oil and another five million barrels per day of oil products normally pass through the Strait of Hormuz.
"This amounts to around 25% of the world's oil trade via sea. And now the flows of oil, gas and other commodities through the strait have all but stopped."
The G7 is comprised of the leading industrialized nations of Canada, the United States, France, Italy, Japan, Germany and Britain. Austria is not a member.
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The group's leaders, including U.S. President Donald Trump, met Wednesday via videoconference to discuss energy issues.
During his introductory remarks, French President Emmanuel Macron praised the IEA decision to release emergency oil stocks, saying it amounted to the equivalent of "20 days of the volume being exported through the Strait of Hormuz." The amount being released by G7 nations, alone, comprises 70% of the total, he said.
"I think it's very important to see as well everything we can do in order to increase our global production," Macron added.
Germany's economy ministry, Katherina Reiche, said the IEA asked Germany to release 2.64 million tons of its oil reserves. It was not immediately clear how much Austria was releasing.
She said it would take a couple of days before the delivery of the first quantities.
"Germany stands behind the IEA's most important principle of mutual solidarity," Reiche said.
The German government also said it will introduce a measure to allow gas stations in Germany to raise fuel prices no more than once a day. The federal government wants to introduce this as quickly as possible, Reiche said.
According to the IEA, export volumes of crude and refined products are currently at less than 10% of prewar levels.
In Austria, starting Monday, price increases at gas stations will be allowed only three times a week, the country's economy minister said. Wolfgang Hattmannsdorfer said his country was releasing part of the emergency oil reserve and extending the national strategic gas reserve, adding: "One thing is clear: in a crisis, there must be no crisis winners at the expense of commuters and businesses."
IEA nations have released emergency stocks on five previous occasions: During the 1990-1991 Gulf War, after Hurricane Katrina in 2005, during the Libyan civil war in 2011, and twice after theRussian invasion of Ukraine.
Birol noted that the situation in natural gas markets is also very challenging, with Asia the most severely affected region.
"There are few options to replace the missing LNG cargoes from Qatar and the Emirates," he said. "Global energy supply has been reduced by around 20%."
Grieshaber reported from Berlin. Associated Press reporters John Leicester and Sylvie Corbet in Paris contributed to this report.
