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The International Energy Agency (IEA) on Wednesday announced the largest-ever release of emergency oil stocks in its history, making 400 million barrels of oil available to global markets to mitigate disruptions caused in the global energy supply by the ongoing West Asia conflict.
In a video statement, IEA Executive Director Fatih Birol highlighted that the conflict has severely impacted global oil and gas markets, particularly through the Strait of Hormuz, and the decision was taken "to offset the supply lost through the effective closure of the Strait." He emphasised that the resumption of oil and gas transit through the Strait of Hormuz remains critical for long-term stability. "IEA countries will be making 400 million barrels of oil available. I repeat, 400 million barrels of oil available to the market to offset the supply lost through the effective closure of the Strait. This is a major action aiming to alleviate the immediate impacts of the disruption in markets. But, to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz," Birol said. He noted that the decision was taken unanimously by IEA countries and is the largest ever release of emergency oil stocks in the agency's history. The decision came amid the global energy supply disruption due to the operational blockage of the Strait of Hormuz amid the conflict in the region and following continuous dialogue with ministers from IEA member countries, key producers including Saudi Arabia and Brazil and major importers such as India and Singapore. The Strait of Hormuz is a critical transit route that normally handles 15 million barrels per day of crude oil and 5 million barrels per day of oil products, representing roughly 25 per cent of global seaborne oil trade. However, due to the conflict in the region, the waterway has been considered high-risk for transit, choking the global energy supply. In addition to that, reported attacks on energy infrastructure have effectively halted flows, leading Middle Eastern producers to cut output. "Refinery operations have also been disrupted, with major implications for jet fuel and diesel supplies in particular," said the IEA Executive Director. Global gas supply has also been disrupted, with limited alternatives to compensate for the LNG shipments from Qatar and the United Arab Emirates. According to IDA, overall, the global energy supply has fallen by approximately 20 per cent, with pre-existing market conditions even tighter than those for oil, with Asia facing the most severe impact on gas availability. The IEA further said it will continue to monitor global energy markets closely and provide further recommendations to member countries as necessary to safeguard energy security. (ANI)
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