IEA eyes oil release 'extension'

Opening sluices: a Pertamina worker at crude oil tanks on Bunyu Island in East Kalimantan, Indonesia

The International Energy Agency(IEA) could decide by mid-July whether the release of strategic oil reserves needs to be extended for a month or two, an official said.

The move would be in defiance of Opec’s criticism of the IEA’s decision last week to release 60 million barrels over an initial 30-day period to fill the gap in supplies left by the disruption to Libya's output.

Richard Jones, deputy executive director of the 28-member agency, said he believed the release would be temporary since demand would likely drop in the fourth quarter.

"We do believe it could be temporary but we have to see how the market evolves. There could be other disruptions, for example, we are compensating for the losses in Libya," Jones said at an event in Mexico City.

A decision on whether to extend the release could be made around the third week of July, he told Reuters.

"It will be up to our member countries - they could decide to continue it for a month or two. I don't see that we'll need to continue it for very long because we see demand declining in the fourth quarter, so we think it's a temporary measure."

Meanwhile, the IEA’s head of energy markets and security Didier Houssin said it would be up to operators to decide whether to release crude or oil products as part of emergency release, as he tried to clear up a misunderstanding over the composition of the new supplies.


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