The price of oil fell on Wednesday after a group of the world’s largest consumers said it would tap into emergency stocks to counter supply problems following Russia’s invasion of Ukraine.
Brent, the international crude oil marker, was down 2.6% at $103.79 a barrel, while West Texas Intermediate, the US benchmark, was down 3% at $98.93.
Fatih Birol, head of the International Energy Agency, said its 31 members were moving forward with a “collective oil stockpile release” of 120 million barrels.
The United States will contribute half that amount, Birol said in a tweet, while the remaining 60 million barrels will come from the rest of the IEA, which counts Germany, Japan and the United Kingdom as members. More details on specific member contributions will be made public soon, he continued.
the @OUCH is moving forward with a collective release of 120 million barrels of oil stocks (including 60 million barrels contributed by the United States as part of its overall drawdown on its Strategic Petroleum Reserve).
More details on the specific contributions will be made public soon.
— Fatih Birol (@fbirol) April 6, 2022
Washington last week announced plans to release 180 million barrels of oil from its strategic oil reserves, which equates to about 1 million barrels a day for six months.
Of that, 60 million will be released in conjunction with the IEA, according to Wednesday’s announcement, while 120 million barrels will be released independently by the United States.
IEA members agreed on Friday to a further release of oil from emergency reserves but provided no details on volumes or contributions.
“This class action, which will exceed the one million barrels per day for 6 months that the United States has pledged to release, brings the combined amount to 240 million barrels“, the US Department of Energy said in a statement, referring to the 60 million barrels of oil pledged by US allies.
The Paris-based body warned last month that 3mb/d of Russian oil production could be “shut down” from April as sanctions kick in and buyers shun exports. The exploitation of emergency reserves will contribute in part to filling this gap.
The latest release follows a 61 million barrel rollout in early March that failed to calm prices, which have endured weeks of stomach-churning volatility.