IEA members to release 60m barrels of oil

Member countries of the International Energy Agency (IEA) on Tuesday agreed to release 60 million barrels of crude reserves — half of it from the United States — to try to curb soaring oil prices stemming from the Ukraine-Russia conflict.

But the move didn't affect oil prices, with Brent crude rising to nearly $107 a barrel after the announcement, its highest level since 2014, while energy experts said the release won't do much to stop surging prices.

"The bottom line is this is not enough to cool off the market. It's a bit of a Band-Aid solution," said Michael Tran, managing director of global energy strategy at RBC Capital Markets.

"You need to super-size the numbers," said Robert Yawger, vice-president of energy futures at Mizuho Securities.

In a note Tuesday, Louise Dickson, the senior oil market analyst at Rystad Energy, said the participating OPEC members are producing about 800,000 barrels a day below their promised stated target levels, "adding to the shortness in the supply market and further stoking the bullish price environment".

The Paris-based IEA said in announcing the release that "global energy security is under threat'' because of the conflict.

"The situation in energy markets is very serious and demands our full attention," said Fatih Birol, IEA executive director, putting "the world economy at risk during a fragile stage of the recovery".

The IEA's decision to tap oil reserves represents its first release since the Libyan civil war in 2011. Prior to that, the IEA released oil reserves during the 1991 Gulf War and the 2005 hurricane season that included hurricanes Rita and Katrina. The reserves were established in the wake of the Arab oil embargo in 1974.

The IEA also includes Germany, France, the UK, Italy, the Netherlands, Japan, South Korea and Canada. They hold emergency stockpiles of 1.5 billion barrels of oil.

While half of the release will come from the US Strategic Petroleum Reserve, the rest will come from Europe and Asia.

The US oil release will represent the Biden administration's second tapping of the Strategic Petroleum Reserve of 600 million gallons stored in underground salt caverns in Louisiana and Texas.

In November, President Joe Biden announced the release of 50 million barrels of oil from the US reserve, but the measure had only a small impact on oil prices.

The White House said in a statement that Biden "was clear from the beginning that all tools are on the table to protect American businesses and consumers, including from rising prices at the pump".