The International Energy Agency (IEA) on Wednesday praised India after the latter welcomed the agency’s decision to release 400 million barrels of oil from emergency reserves as tensions escalate over the US and Israel’s war in Iran, reuters reported.
IEA’s Executive Director Fatih Birol said he is “pleased to read India’s supportive statement for IEA’s action to release oil stocks to address disruptions in global oil markets.”
Earlier today, India, as a member country of the IEA, welcomed the decision to release emergency oil to address concerns in global oil markets.
In a press release, the Press Information Bureau (PIB) said, “India, as an Associate Member of the International Energy Agency (IEA) and an active participant in international energy cooperation, welcomes the IEA’s decision to release emergency oil stocks amid the prevailing supply disruptions.” It added that the Indian government is closely monitoring the situation in global energy markets, particularly in the Middle East.
The statement further said that New Delhi stands ready to take “appropriate measures” as necessary, to support global market stability, keeping in line with the efforts of the IEA.
US-Israel-Iran war rattles global markets
The US and Israel launched strikes on Iran 12 days ago, and there seems to be no signs of the conflict easing. As Tehran retaliated to strikes, its decision to target US bases in the Gulf region and Israel plunged the Middle East region into a wider military confrontation, with ripple effects occurring across industries and sectors.
Oil prices on Monday jumped to $120 a barrel, spooking traders and investors about the disruptions that lie ahead. Additionally, Tehran’s Islamic Revolutionary Guards Corps (IRGC) has shut the Strait of Hormuz, a key waterway, accounting for one-fifth of the world’s oil supply.
Amid ongoing attacks in the Middle East, several energy companies have invoked force majeure, a legal term that excuses them from fulfilling obligations in the case of an unexpected or extraordinary event.
Amid all these developments, the global energy markets are likely to witness supply disruptions. On Monday, a group of G7 countries met and agreed to take “necessary measures” to support the global energy supply. However, the meeting concluded without any agreement.
IEA to release 400 million barrels of oil
In a statement released today, Birol announced that a collective decision was made to take emergency action after a recent meeting. The meeting was intended to assess market conditions and consider the options available to address the supply disruptions.
The IEA, which has over 1.2 billion barrels of oil in emergency reserves, said that the oil market is facing challenges which are of an unprecedented scale. The agency also has an additional 600 million barrels in industry stocks, which are held under government obligations.
