IEA (International Energy Agency) has announced that 28 members of IEA would release 2 million barrels a day (bpd) over an initial 30 days to fill the gap in supplies left by the disruption to Libya's output.
"Greater tightness in the oil market threatens to undermine the fragile global economic recovery," the IEA said.
Energy Department of United States said that it will release 30 million barrels of oil from its 727 million barrel reserve, about half of the 60 million barrels to be released globally. The U.S. release would be equivalent to 1.5 days of total U.S. oil consumption.
It typically takes about 13 days for oil from the reserves to reach the market once the order is issued.
This is the third time IEA member-country stocks have been used. IEA member countries released oil stocks in 2005, after Hurricane Katrina damaged oil and gas refineries in the Gulf of Mexico. And, IEA member countries mandated a stock release at the time of Iraq's invasion of Kuwait in 1990/1991.
This Oil stock release plan may not lower the oil price.
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