This will be just the third time the IEA will have released any of its oil reserves since it was founded in 1974.
Oil prices fell by as much as 7% yesterday (23 June) as Brent crude dropped to $107 (£67) per barrel, its lowest level for four months. The FTSE closed 1.7% lower than the start of the day, its lowest level since 16 March; the Dow dropped 1%; the S&P 500 lost 1.4%.
These falls came after the IEA’s executive director Nobuo Tanaka announcement that its 28 member countries are preparing to release two million barrels a day for 30 days in response to the ongoing disruption of oil supplies from Libya.
Tanaka said: “This supply disruption has been underway for some time and its effect has become more pronounced as it has continued. The normal seasonal increase in refiner demand expected for this summer will exacerbate the shortfall further. Greater tightness in the oil market threatens to undermine the fragile global economic recovery.
The IEA’s governing board will reassess the oil market in 30 days time before deciding any further steps.
