BackOil prices ease on release of emergency stock by IEA
The decision to launch two emergency oil stock releases just a month apart reflects the determination of member countries to protect the global economy from the social and economic impacts of an oil shock following Russia’s invasion of Ukraine
PremiumNEW DELHI: Crude oil prices fell marginally in early deals on Friday after members of the International Energy Agency (IEA) agreed to a 120-million-barrel release of crude and oil from emergency stockpiles to help cool global prices which have surged following Russia's invasion of Ukraine.
This is the second collective release this year by the IEA members comes in the wake of significant strain in oil markets following disputed supplies amid the Russia-Ukraine crisis.
Last month, members of IEA had agreed to release 62.7 million barrels of oil.
At 0923am., the June contract of Brent on the Intercontinental Exchange was at $100.06 per barrel, down 0.52% from previous close. The May contract of West Texas Intermediate on the NYMEX fell 0.39% to $95.66 per barrel.
The commitments submitted by IEA members reached 120 million barrels to be released over a six-month period. The US will contribute about 60 million barrels, which are part of the larger drawdown from its Strategic Petroleum Reserve (SPR) that was announced on 31 March.
An IEA statement said that over the next six months, around 240 million barrels of emergency oil stocks, the equivalent of well over 1 million barrels per day, will be made available to the global market.
IEA executive director Fatih Birol said, “The unprecedented decision to launch two emergency oil stock releases just a month apart, and on a scale larger than anything before in the IEA’s history, reflects the determination of member countries to protect the global economy from the social and economic impacts of an oil shock following Russia’s aggression against Ukraine."
Following the announcement by IEA, India said it was looking at ways to support the Agency's move to release oil from its emergency reserve.
In a statement, the union ministry of petroleum and natural gas said the government of India welcomes the announcement by the IEA for collective oil stock release of 120 million barrels.
"In the interest of collaborating with like minded countries on these positive initiatives, government of India is examining what it can do to support these actions, " the ministry said in its statement on Thursday.
As a major consumer of energy, India has consistently espoused the importance of stable, affordable and accessible global energy markets, it said, adding that the government of India hopes that these initiatives will bring equanimity to global energy market.
In February, the ministry had said that it was committed to “supporting initiatives for releases from Strategic Petroleum Reserves." The government had in December agreed to release 5 million barrels of crude oil from its strategic petroleum reserves in consultation with other global energy consumers amid rising prices and supply concerns
As per the consumption pattern of 2019-20, the total capacity in the established Strategic Petroleum Reserves facilities of 5.33 million metric tonnes (MMT) is estimated to provide for about 9.5 days of crude oil requirement.
India has three strategic reserves -- Vishakhapatnam (1.33 MMT), Mangaluru (1.5 MMT) and Padur (2.5 MMT) -- operated by Indian Strategic Petroleum Reserve (ISPRL).
Meanwhile, Indian oil marketing companies kept retail fuel prices unchanged for the second consecutive day on Friday. In Delhi, petrol sold for ₹105.41 per litre and diesel for ₹96.67 a litre.
Since the daily price revision which resumed on March 22, oil marketing companies have raised fuel prices by a total of ₹10 per litre each.
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