The United States is in talks with its allies about a potential additional coordinated release from strategic petroleum reserves in a bid to ease the market tightness following Russia’s invasion of Ukraine, U.S. Energy Secretary Jennifer Granholm said in Europe on Thursday.
“With respect to the emergency stockpiles, these are ongoing discussions and all those tools are certainly on the table,” Granholm said during a news conference at the headquarters of the International Energy Agency (IEA) in Paris, as carried by Reuters.
Following Putin’s invasion of Ukraine, the member countries of the governing board of the IEA agreed to release 60 million barrels of oil from their emergency reserves “to send a unified and strong message to global oil markets that there will be no shortfall in supplies as a result of Russia’s invasion of Ukraine.”
IEA members hold emergency stockpiles of 1.5 billion barrels. The announcement of an initial release of 60 million barrels, or 4 percent of those stockpiles, is equivalent to 2 million barrels a day for 30 days, the IEA said in early March.
The sanctions against Russia and the “self-sanctioning” of many European buyers are estimated to remove around 3 million barrels per day (bpd) of Russian oil supply beginning in April, the IEA warned last week.
Unless OPEC heavyweights Saudi Arabia and the United Arab Emirates (UAE)—the only two oil producers with sufficient production capacity—step in to fill some of the gap, a large-scale global oil shortage is looming, considering that India and China will likely be unable to take all the Russian oil unwanted in the West.
During the IEA Ministerial Meeting today, chaired by Secretary Granholm, global energy leaders sent “a strong message of unity on the need to strengthen energy security, reduce market volatility, and accelerate clean energy transitions worldwide,” the IEA said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.