The International Energy Agency does not have immediate plans to encourage natural gas emergency reserves among member countries, but it is urging them to pay attention to gas security amid escalating tensions in the Middle East.
"I think it is very important for governments to be prepared and ensure resilience of natural gas supply and demand," IEA's head of energy markets and security Keisuke Sadamori said.
Speaking at a Sept. 26 press briefing on the sidelines of the LNG Producer-Consumer Conference in Tokyo, Sadamori said the IEA has not ruled out future discussions of gas reserves by its members. The IEA is made up of 30 member countries, including the United States, Canada, Mexico, Germany, France, the United Kingdom, Japan and South Korea.
Sadamori said the agency's priority is to implement policy that focuses on market analysis and ensures the transparency of global LNG markets.
"We have been advocating the need for flexibility in the [LNG] market on the supply and demand side, and flexible pricing systems [that] reflect regional supply and demand balance," Sadamori said. "We believe it is our duty to implement this direction, which is mandated by IEA ministerial meetings back in 2015."
Asked about escalating tensions in the Middle East, Sadamori said the agency does not see any impact on LNG supply from the region, because recent attacks on oil facilities were limited to Saudi Arabia.
But Sadamori said the "deteriorating Middle East security situation may impact LNG supply in particular if there is any serious conflict, in particular, a serious trouble involving the Strait of Hormuz that would be a major course of transit of LNG from Qatar and the [United Arab Emirates]." LNG supplies from Qatar and UAE account for one-quarter of the global LNG trade, he added.
Global energy security came under the spotlight after the tanker attacks in the Gulf of Oman near the Strait of Hormuz in May and June. About 30% of the world's seaborne oil transits the Strait of Hormuz.
Any event at the Strait of Hormuz could have an impact on oil supply of about 20 million barrels per day, Sadamori said. It is a "very serious situation for global energy supply security," he said.
Takeo Kumagai and Eric Yep are reporters with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.
