THE West’s energy watchdog said yesterday it was ready to release oil stocks should the market experience shortages following Israel’s attack on Iran, drawing criticism from rival Opec which said the statement would only create fear in the market.
The International Energy Agency, representing oil consumers, and the Organisation of the Petroleum Exporting Countries, representing some of the world’s top oil producers, have in recent years clashed on global oil demand trajectories and the pace of the energy transition.
The IEA’s head Fatih Birol said that while the oil market was well supplied, the agency would be ready to act if needed, adding that the agency’s oil security system held 1.2 billion barrels of oil in strategic and emergency reserves.
Opec Secretary General Haitham Al Ghais criticised Birol’s statement, saying it “raises false alarms and projects a sense of market fear through repeating the unnecessary need to potentially use oil emergency stocks”.
He said there were no developments in supply or market dynamics that “warrant unnecessary measures”.
The United States and its allies, in coordination with the IEA, last tapped emergency oil stocks in early 2022 after the Russian invasion of Ukraine, a decision that Opec heavily criticised at the time,
While Israel has stopped short of targeting Iran’s energy facilities, market participants are wary the situation may escalate further leading to damage to energy infrastructure in Iran or its neighbours, as well as a blockade of the Strait of Hormuz.
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