The IEA’s decision to release 400 million barrels of oil from global strategic reserves has already had a “strong impact” on energy markets, which are in an “extremely critical period” after the closure of the Strait of Hormuz, its Executive Director Fatih Birol said on Thursday.
The International Energy Agency’s coordinated move in the face of the Iran war was aimed to stabilise oil markets, Birol said at an Istanbul press conference.
He declined to respond to a question on the daily pace of release from stockpiles.
The IEA, made up of major oil consuming nations, on Wednesday recommended releasing 400 million barrels from global strategic reserves to dampen one of the worst oil shocks since the 1970s, the biggest such intervention in history.
“We are already seeing a strong impact from this move,” Birol said, calling the IEA decision “an extremely significant development”.
“Global energy markets are going through an extremely critical period due to developments in the Middle East. In particular, the closure of the Strait of Hormuz has caused serious disruptions in global oil and natural gas markets,” he said, adding the decision was made in response to this.
U.S. President Donald Trump said the IEA decision will “substantially” reduce oil prices amid the U.S.-Israel war with Iran, while Tehran warned that oil could reach $200 a barrel after striking tankers in Iraqi waters and other ships near the vital Strait of Hormuz.
(Reporting by Ezgi Erkoyun; Additional reporting by Ece Toksabay; Editing by Jonathan Spicer)