The International Energy Agency was surprised by the Biden administration’s March 31 announcement that it would release 180 million barrels of oil from reserves over the following six months, according to a new report — with one source telling Reuters the organization was “embarrassed” that it had not been told of the move in advance.
The wire service, citing “two sources familiar with the matter,” reported Monday that the White House had failed to notify the IEA that it would announce the release from the Strategic Petroleum Reserve (SPR) a day ahead of an extraordinary meeting of the organization to discuss a coordinated supply boost.
“The IEA was embarrassed by the [US] release which was at the start done essentially unilaterally by the US,” one of the sources was quoted as saying.
“It is the common understanding of IEA members that we must cooperate as a whole,” said another source, who added that the announcement was a surprise.
At the time, President Biden announced his administration would release 1 million barrels of oil per day in a bid to offset gas price increases tied to rising inflation as well as sanctions imposed on Russia over its invasion of Ukraine.
At the time, the president said the order could cause prices at the pump to “come down fairly significantly.”
After the following day’s extraordinary meeting, Reuters reported, IEA leadership persuaded the organization’s 30 non-US member countries to release another 60 million barrels between them.
However, according to the organization’s rules, the coordinated release should have matched the 180 million barrels announced by the US.
“That wasn’t doable,” one of the sources said. “It was impossible as no one had such stocks.”
According to the report, the IEA tried to couch the discrepancy by issuing a statement touting an agreed release of 120 million barrels, with half of that figure coming from the US over the following two months.
“The optics of the release being done 75% in the US and 25% in the rest of the world are simply strange,” one source told Reuters.
Senior Energy Department officials denied Monday that the IEA was left in the dark about the pending release, telling The Post that during the agency’s regular ministerial meeting the week before the announcement, Secretary of Energy Jennifer Granholm mentioned to her fellow officials that the US would be “taking action.”
“We do take very seriously the importance of, you know, sharing information because that’s, that’s what’s going to make our collective response efforts more impactful,” one official said.
The senior official insisted that the department is in constant communication with the IEA “on a weekly basis, and I would say it’s probably more like daily.”
The IEA told The Post that the agency remains “in close contact with all member countries throughout the deliberations and decision making associated with both collective actions (the decisions taken 1 March and 1 April) including with the USA in the lead up to its announced decision on 31 March to release SPR oil.”
“This consultation as well as the decisions for taking collective action were conducted in line with IEA procedures, which include the agreed steps to be taken when coordinating collective stock release among IEA members,” the agency said.
Founded in the wake of the 1973 oil crisis, the IEA has long sought to push a “collective response system” in order to “mitigate the negative economic impacts of sudden oil supply shortages by providing additional oil to the global market.”
The Energy Department officials shrugged off concerns Monday about the scale of the US release compared to the rest of the IEA’s members.
“It would be kind of crazy to imagine that the US would be releasing in a collective response the same amount of oil … [as] like, I don’t know, like Ireland,” one official told The Post. “I mean, this just would not compute. There’s clearly a delineation there based on the size of the economy.”
“The IEA is…an organization that really amplifies our collective response to energy security emergencies,” another senior official said. “And in this instance, at all instances, we worked very hard to coordinate with the IEA, with its 31 members, with the secretary.”
The IEA also emphasized to The Post that each member country “has the ability to release strategic reserves independently, according to national circumstance, in order to deal with a domestic disruption or, as in this instance of the US SPR, to release in addition to the IEA collective action.”
“There are numerous past instances of countries using their strategic reserves for domestic disruptions,” the IEA went on.
The White House did not immediately respond to The Post’s requests for comment.
