IEA director says energy markets at 'critical turning point'

ISTANBUL - IEA Executive Director Fatih Birol said on Thursday that global energy markets are at a "critical turning point," after his agency on Wednesday recommended a coordinated release of global reserve oil in the face of the Iran war.

The closure of the Strait of Hormuz prompted the IEA's announcement, he said at an Istanbul press conference.

The International Energy Agency, made up of major oil consuming nations, on Wednesday agreed to release 400 million barrels from global strategic reserves to dampen one of the worst oil shocks since the 1970s, the biggest such intervention in history.

Birol said that his agency's decision to release global reserve oil in the face of the Iran war had a "strong impact" on the energy markets.

“The move was aimed at stabilising oil markets,” Birol said.

The IEA said all 32 member countries backed the move, the sixth coordinated stockpile release since the agency's creation in the 1970s. The United States will take a lead role by contributing 172 million barrels, according to US Energy Secretary Chris Wright.

"President Trump promised to protect America’s energy security by managing the Strategic Petroleum Reserve responsibly and this action demonstrates his commitment to that promise," he said in a press release announcing the contribution.

The release is aimed at combatting a spike in oil prices caused by disruptions to around a fifth of global oil and gas supply along the Strait of Hormuz since the war began February 28, according to the IEA.

Iran said on Wednesday the world should be ready for oil at $200 a barrel as its forces continue to hit merchant ships on the strait.

An Italian government source said on Thursday that Italy will contribute with 9 million barrels to a coordinated release of strategic oil reserves, joining other IEA members.

Asked about the timing, the source said "availability was immediate."