To stabilize soaring global oil prices amid the heightening crisis between Russia and Ukraine, South Korea on Wednesday decided to join the International Energy Agency to release 60 million barrels to the market.
According to the Ministry of Trade, Industry and Energy Wednesday, the 31 members of the IEA held an online meeting on Tuesday and agreed to inject some 60 million barrels of emergency reserves to alleviate concerns over an oil supply crunch as the result of Russia’s ongoing invasion of Ukraine.
“South Korea will actively participate for the release of emergency reserves as well as export and financial sanctions regarding the Ukraine crisis,” said Industry Minister Moon Sung-wook.
Moon further added that the discussion will immediately commence to decide the timing to implement the measure. Also, the minister pledged to cooperate with the international community regarding other energy sources such as natural gas.
The ministerial-level meeting was convened by the US, the nation chairing the IEA. During the meeting, the ministers expressed solidarity with the people of Ukraine and concerns over the energy security impacts of the actions by Russia.
The ministers also noted that Russia’s invasion comes against a backdrop of already tight global markets, and with their inventories at their lowest level since 2014.
IEA members hold emergency stockpiles of 1.5 billion barrels. The initial release of 60 million barrels, or 4 percent of those stockpiles, is equivalent to 2 million barrels a day for 30 days.
The coordinated drawdown is the fourth in the history of the IEA, which was created in 1974 in the aftermath of Arab nations’ oil embargo against the US in retaliation for supporting the Israeli military.
Russia is the world’s third-largest oil producer and the largest exporter. The country exports about 5 million barrels of crude oil per day, which represents roughly 12 percent of global trade. Also, its 2.85 million barrels of petroleum products a day take up around 15 percent of the global refined product trade. Roughly 60 percent of Russia’s oil exports go to Europe and another 20 percent to China.