International Energy Agency Announces Largest Oil Release in History to Combat Rising Prices
In an unprecedented move, the International Energy Agency proposed to release more than 182 million barrels from its strategic reserves in an attempt to curb the soaring oil prices caused by the ongoing war between Israel and the UAE.
This emergency proposal comes in response to the serious economic repercussions of the closure of the Strait of Hormuz, the maritime passage through which about one-fifth of the world's oil flows daily.
According to sources from the Wall Street Journal, this proposal is the largest of its kind in the agency's history, surpassing the volume of previous releases in 2022 during the Russian invasion of Ukraine, where oil was released in two batches.
The proposal was presented during an urgent meeting of energy officials from the 32 member countries on Tuesday, with a final decision to be made on Wednesday, provided that no country objects, as a single objection could delay the plan.
* Reason for the Release: The Threat of the Strait of Hormuz
This extraordinary step comes after a near-complete halt of oil shipments due to Iranian threats against oil tankers passing through the Strait of Hormuz, the same scenario that prompted Western nations to establish the International Energy Agency in 1974 following the Arab oil embargo.
The agency aims through this proposal to protect the global economy from oil price fluctuations and ensure stability in energy markets.
* Oil Prices Fluctuate Sharply
Since February 28, after the start of U.S. and Israeli strikes on Iran, oil prices have risen by as much as 40%, exceeding $100 per barrel before dropping this week to below $84, while diesel and other fuel prices continued to rise.
Economists have warned that continued increases could lead to high inflation and corrections in stock markets, in addition to rising fuel costs for consumers.
* Current Stocks Sufficient for Months
The agency's executive director, Fatih Birol, confirmed that member countries hold 1.2 billion barrels in public stocks, in addition to another 600 million barrels in mandatory commercial stocks, which is enough for about 124 days of lost supplies from the Gulf.
* Previous Experiences: Between Success and Challenges
Historically, releases from reserves have shown mixed results. In 2022, releases following the Russian invasion of Ukraine initially led to a 20% rise in oil prices, before later contributing to alleviating the crisis.
The most notable successful release occurred in 1991, when then U.S. President George H.W. Bush ordered the strategic oil release at the start of Operation Desert Storm against Iraq, resulting in a price drop of more than 20% on the first day.
