On June 23, 2011 the International Energy Agency (“IEA”) announced a coordinated release of sixty million barrels of oil reserve from twenty-eight countries, and the United States has committed to releasing 30 million barrels from the U.S. Strategic Petroleum Reserve. The release of oil is said to offset the loss of Libyan crude production and lessen its impact on global economic recovery; however, the announcement sparked controversy as some political opponents said the release was unnecessary at this time and was being used as a vehicle to offset the impact of high gasoline prices. IEA defended their decision by noting that the current situation in Libya has removed 132 million barrels of oil from the market as of the end of May, and the combination of the upcoming increased summer demand and fragile global economy make the coordinated release necessary.
This release will be the third time ever that the IEA has made a coordinated release. The first time it was done was after Iraq invaded Kuwait from 1990-1991. The second release was when the 2005 Hurricane Katrina caused refineries to close in the Gulf of Mexico. The IEA said it will re-evaluate the release of oil reserves within thirty days.
The IEA press release is available here.