The International Energy Agency’s announced drawdown of strategic stocks to calm markets is precedent-setting in critical ways, whether or not that was the intention of its key members. They include all the industrial market countries and all the major oil importing countries, with the exception of China and India.
Among the most interesting aspects of the stock release was its apparent co-ordination with increases in production by key Arab oil producing countries that are members of the Gulf Co-operation Council, in particular Saudi Arabia, Kuwait and the United Arab Emirates.
As the IEA’s press release made clear, the main reason for the co-ordinated release by its members was to make up for the loss of oil supply that has accompanied civil disorder in Libya, which effectively stopped exporting oil in February. By the IEA’s reckoning, a total of 132m barrels of Libyan crude have been lost to markets as a result of that disruption.