The International Energy Agency will release the largest amount of emergency oil reserves in the organization’s history — 400 million barrels of oil.
The Associated Press said the release is to counter the effects of the war in the Middle East. It will take a couple of days for the start of the oil to be delivered.
Previously, the IEA’s 32 member countries released 182.7 million barrels in 2022 after the Russian invasion of Ukraine.
Iran has attacked ships and threatened attacks in the Persian Gulf in response to attacks by the U.S. and Israel, The Wall Street Journal reported. Nearly all cargo traffic in the Straight of Hormuz has been stopped. The Strait is the passageway for a fifth of the oil used globally.
Iran also started laying mines in the Strait, according to the Wall Street Journal.
“Without sufficient routes to market and with no more available storage, Middle East oil producers have started to reduce production,” IEA executive director Fatih Birol said. “And we have seen further attacks and damage to energy and energy-related infrastructure. Refinery operations have also been disrupted, with major implications for jet fuel and diesel supplies in particular.”
The cost of a barrel of oil skyrocketed after the attacks on Iran on Feb. 28, nearly costing $120 a barrel, but returning to under $90, CNBC reported.
More than 1.2 billion barrels of emergency oil stocks are held by IEA member countries, with an additional 600 million barrels of industry stocks.
The stockpile was created in 1974 after the Arab oil embargo.
Emergency oil has been released five times previously.
The average price for a gallon of gas as of March 11 was $3.578, according to AAA. The highest is in California with $5.336 a gallon, while the lowest is in Kansas at $3.008.
A month ago, the average price for regular was $2.937, according to AAA.
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