IEA to hold special meeting March 1 on market stability amid Ukraine crisis

The International Energy Agency's member countries will hold an extraordinary ministerial meeting March 1 to discuss the impact of Russia's invasion of Ukraine on global oil supplies and how its members can help stabilize the oil markets, IEA general secretary Fatih Birol said in a tweet Feb. 28.

The move comes a week after the IEA said its member countries "stand ready to act collectively to ensure that global oil markets are adequately supplied" as the escalating Russia-Ukraine stand-off pushed oil prices above $90/b.

After Russia's full invasion of Ukraine last week, ICE Brent futures surged above $105/b on Feb. 24 for the first time since 2014. The May ICE futures contract was trading around $98/b at 15:30 GMT on Feb. 28.

IEA members held close to 4.16 billion barrels in total oil stocks as of the end of 2021, including 1.5 billion barrels held by governments as emergency reserves. The group of the world's top oil-consuming countries requires members to hold 90 days of net imports in government or commercial storage.

US strategic reserves

The US, a key member of the IEA, has said it is open to a coordinated release of strategic oil stocks to the market with other IEA members.

Speaking on Feb. 24, US President Joe Biden said the US would release additional barrels from the Strategic Petroleum Reserve "as conditions warrant" to limit pain for US consumers and avoid disruptions to energy supplies.

A White House official told Platts Feb. 24: "The Biden administration is exploring with other countries another strategic petroleum reserve release with ally countries if needed. No decisions have been made."

In November, Biden ordered a release of 50 million barrels from the US Strategic Petroleum Reserve when WTI prices were about $78/b. The US SPR held 584.8 million barrels as of Feb. 11, the lowest since September 2002.

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Low stock levels

On Feb. 22, the IEA said it was monitoring with "growing concern" Russia's actions, noting that most at oil supply risks are the roughly 250,000 b/d of Russian oil exports transiting Ukraine via the southern branch of the Druzhba pipeline to Hungary, Slovakia and the Czech Republic.

Although the supplies through the southern Druzhba line have so far not been affected, the countries it supplies have "ample government held emergency stocks to draw upon in case of need" the IEA said Feb. 22.

OPEC and its partners have since said they expect to stick with their planned modest production increases each month, according to delegates, despite Brent crude futures soaring above $105/b. OPEC+ energy ministers are scheduled to meet March 2 to decide whether to continue restoring crude production in monthly 400,000 b/d increments.

On Feb. 11, the IEA said OECD industry oil inventories declined steeply to seven-year lows in December, falling by "a hefty" 60 million barrels, led by large draws in middle distillates across all regions. Crude and product stocks are unlikely to reach more "more comfortable" levels until late in Q3 2022, it said, with little prospect for a full recovery.