All 31 member countries of the International Energy Agency have agreed to release 60 million barrels of oil from their strategic reserves—half of that from the United States—"to send a strong message to oil markets" that there will be "no shortfall in supplies" after Russia invaded Ukraine, the group said Tuesday. The board of the Paris-based IEA made the decision at an extraordinary meeting of energy ministers chaired by US Energy Secretary Jennifer Granholm. She said in a statement that President Biden approved a commitment of 30 million barrels and that the US is ready to "take additional measures" if needed. It’s only the fourth time in history that the IEA has done a coordinated drawdown since the reserves were established in the wake of the Arab oil embargo in 1974.
Russia plays an outsized role in global energy markets as the third-largest oil producer, with the AP reporting its exports of 5 million barrels of crude per day amount to about 12% of the global oil trade. Some 60% goes to Europe and another 20% to China. So far, US and European sanctions have not barred oil or gas exports and have included exceptions for transactions to pay for oil and gas. Western leaders are reluctant to restrict Russian oil exports at a time when global energy markets are tight and high prices are fueling inflation in developed economies. But the invasion has still shaken markets worldwide. On Tuesday, oil prices soared, with US benchmark crude surpassing $100 per barrel—the highest price since 2014.
Besides the United States, other members of the organization include Germany, France, the United Kingdom, Japan, and Canada. IEA members hold emergency stockpiles of 1.5 billion barrels of oil. The release amounts to 4% of stockpiles, or roughly 2 million barrels per day for 30 days. From the US perspective, the price of crude oil determines a big portion of what drivers pay to fill up their cars with gasoline. The national average for a gallon of gas is $3.61, which is 26 cents more than a month ago and 90 cents more than a year ago, according to motor club federation AAA. (Read more oil stories.)