A Look at the IEA 2011 Release of Strategic Oil Reserves Actuelles de l'Ifri, July 2011
This paper examines the motivations and the potential consequences of the International Energy Agency’s coordinated action to release petroleum stocks on June 23, 2011.
On June 23, 2011, the International Energy Agency (IEA) coordinated the release of 60 million barrels of emergency stocks in response to the disruption of oil production in Libya due to civil unrest. This announcement elected a mixed reaction from the public and from the market. Some politicians in the United States called the move a political decision by the President to satisfy voters, private oil companies did not like the interference, and some OPEC countries were upset and called the release unnecessary.
The reason why there was a strong reaction was because the IEA had never coordinated a release in this manner before. It was only the third time there had ever been a release, after the First Gulf War in 1991 and for Hurricane Katrina and Rita in 2005. The circumstance and decision for the June 23 drawdown was more flexible and may signal a change in the way strategic petroleum stocks are used....