Why in the News
The International Energy Agency announced a record release of 400 million barrels of oil from strategic reserves to stabilise global markets after oil prices surged due to the US-Israel war with Iran.
Key Points
- Largest Release Ever
- IEA’s 32 member countries agreed to release 400 million barrels of oil.
- This is the largest coordinated release in the agency’s history.
- It is the sixth emergency release since the IEA was created in 1974 after the oil crisis.
- India is not a full member of the IEA.
- Reason for the Decision
- The conflict disrupted oil supply routes in the Middle East.
- Tanker movement through the Strait of Hormuz has been blocked or restricted.
- Around 20 million barrels per day of oil flows are affected.
- Contribution by Countries
- Member countries will release oil based on their national circumstances.
- Japan plans to release about 80 million barrels from its reserves.
- Market Reaction
- Oil prices initially fell but rebounded later.
- Markets doubt whether the release will offset the large supply disruption caused by the conflict.
- Comparison with Earlier Crisis
- During the Russia–Ukraine War, IEA countries released 182.7 million barrels, previously the largest coordinated action.
Strategic Oil Reserves
- IEA member countries collectively hold over 1.2 billion barrels in emergency reserves.
- An additional 600 million barrels are held by industry under government obligations.
Significance
- Aims to stabilise global oil prices and supply.
- Demonstrates international coordination during energy crises.
- Highlights global vulnerability to disruptions in key energy transit routes like the Strait of Hormuz.
| In the context of global oil prices, “Brent crude oil” is frequently referred to in the news. What does this term imply? It is a major classification of crude oil. It is sourced from the North Sea. It does not contain sulphur. Which of the statements given above is/are correct?(a) 2 only (b) 1 and 2 only (c) 1 and 3 only (d) 1, 2 and 3 |
