IEA May Release More Oil Reserves as Brent Crude Surges Above $95

Singapore-based Sparta Commodities Senior Oil Market Analyst June Goh believes that the International Energy Agency (IEA) may need to release more strategic petroleum reserves if Brent crude stays elevated. The IEA has already released a first batch of emergency oil reserves following its historic 400-million-barrel collective action announcement on March 11, but there is still room for another coordinated intervention.

Goh points out that several countries within the IEA framework have not yet contributed their full share of strategic reserves. Japan and Korea, in particular, are said to have 'a lot more to spare', while the US still has some capacity, albeit with concerns about the safety of its caverns. She also notes that sustained prices above $95 per barrel could trigger another coordinated release.

Goh attributes the ongoing support for oil prices to supply-side risks and disruptions to critical shipping routes. 'Everyone seems to have forgotten that 1 billion barrels of inventory is lost', she says, highlighting the need for part of this to be recovered through releases like the IEA's strategic petroleum reserves.