【Iran Crisis】IEA member countries agree to release 400 million barrels of emergency oil reserves; Japan will release 80 million barrels, South Korea 22.46 million barrels, and the UK 13.5 million barrels.

International Energy Agency (IEA) Statement: On Wednesday (11th), the 32 member countries of the IEA unanimously agreed to release 400 million barrels of oil from emergency reserves, the largest ever, to address the market turmoil caused by the Middle East war. The emergency reserves will be released at appropriate times that suit each member country’s circumstances, and some members will also take additional emergency measures to supplement.

Japan announced it will release 80 million barrels, South Korea will release 22.46 million barrels, and the UK will release 13.5 million barrels.

Prior to the IEA statement, Japan announced it would start releasing about 80 million barrels of crude oil reserves as early as next Monday (16th). Japanese Prime Minister Fumio Kishida stated that oil tankers still cannot pass through the Strait of Hormuz, and it is expected that Japan’s crude oil imports will significantly decrease by the end of this month. Japan relies heavily on the Middle East and will be severely affected. Therefore, Japan made an official decision before the IEA’s collective release, to start releasing reserves as early as next Monday (16th), releasing an amount of oil equivalent to Japan’s 15 days of consumption from private reserves, and an amount equivalent to one month of consumption from national reserves.

Kishida Fumio indicated that, given the uncertain outlook of the Middle East situation, Japan will continue to flexibly explore ways to provide support in the future. The government will utilize existing funds previously set aside to prevent fuel price hikes, aiming to keep gasoline prices around 170 yen per liter.

Germany also announced it will release part of its oil reserves, planning to contribute a total of 2.4 million tons of oil, but did not specify when it will take effect.

IEA Member Countries Currently Hold 1.2 Billion Barrels of Public Emergency Oil Reserves

The IEA statement quoted IEA Executive Director Fatih Birol as saying that the crude oil market is facing unprecedented challenges, and he is very pleased that IEA member countries are taking an unprecedented collective emergency action. The oil market is global, and responding to major emergencies requires global measures.

IEA member countries currently hold 1.2 billion barrels of public emergency oil reserves, with an additional 600 million barrels of industry reserves held mandatorily by governments. This coordinated release of reserves is the sixth since the IEA’s establishment in 1974. Previously, the IEA took collective action in 1991, 2005, 2011, and twice in 2022.

French President Emmanuel Macron hosted a virtual G7 leaders’ summit at 10 PM Hong Kong time to discuss the Iran crisis and rising energy prices. Earlier, G7 energy ministers issued a statement saying they are prepared to coordinate with the IEA to take “all necessary measures” to respond to the oil price surge caused by the Middle East war. The statement said, “In principle, we support taking proactive measures to address the current situation, including the use of strategic reserves.” Reports indicate that the IEA has proposed releasing about 300 to 400 million barrels of emergency oil reserves to curb soaring oil prices.

The statement also said, “We are working closely with the IEA, monitoring energy market trends, and coordinating within the G7, with our international partners, IEA member countries, and others.”