IEA agrees second emergency stock release; to publish details 'early next week'

The International Energy Agency agreed April 1 to a second emergency release of oil reserves in response to 'market turmoil' caused by Russia's invasion of Ukraine(opens in a new tab) but said details of the release would come early next week.

The agreement among the IEA's 31 member countries was reached at an extraordinary meeting held at the ministerial level and chaired by US Secretary of Energy Jennifer Granholm, the IEA said.

"The ministers noted that Russia's war in Ukraine continues to put significant strains on global oil markets, resulting in heightened price volatility. This is taking place against a backdrop of commercial inventories that are at their lowest level since 2014 and a limited ability of oil producers to provide additional supply in the short term," the IEA said in a statement.

The widely anticipated decision to release more stocks comes a day after the US, a key IEA member, ordered the largest drawdown from its strategic petroleum reserve in history to help tackle soaring pump prices.

Speaking earlier April 1, US President Joe Biden said the IEA had reached deal to release 'tens of millions of additional barrels' from global oil reserves.

The IEA, which was formed in the wake of the 1974 oil price shock, already committed to releasing almost 62 million barrels of strategic oil stocks on March 1 to calm crude prices, marking the largest emergency oil stock release in its history.

Biden said March 31 the Department of Energy would sell an unprecedented 1 million b/d from the Strategic Petroleum Reserve(opens in a new tab) for the next six months as part of efforts to rein in gasoline prices that have soared following Russia's invasion of Ukraine(opens in a new tab).

The 180-million-barrel drawdown would deplete almost a third of the SPR, reducing it to its lowest level since 1984. Barrels from this SPR release are expected to hit the market starting in May.

The IEA had previously estimated that Russian oil losses could reach 3 million b/d in the second quarter(opens in a new tab), but most forecasts more cautious estimating 1- 2 million b/d.

S&P Global Commodities Insights forecasts 2.8 million b/d of Russian crude production shut-ins due to export dislocations from sanctions and buyer aversion from late April through the end of 2022. Disruptions are estimated to moderate to 2 million b/d by end-2023 as barrels are redirected and/or more cargoes "cautiously purchased."

The IEA's move also comes a day after OPEC+ stuck to its planned 432,000 b/d hike in May(opens in a new tab), despite pressure to tap additional spare capacity and boost output further.