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Libyan oil exports halted

What impact did the IEA’s decision to compensate for the shortage of Libyan exports have on SAGESS?

On June 23, 2011, members of the International Energy Agency Energy (IEA) released 60 million barrels of oil from their strategic stocks to compensate for shortage of Libyan exports. 28 IEA Member States agreed to release this amount on the market for an initial 30-day period, as specified by Mr. Nobuo Tanaka, the IEA Managing Director, at a press conference held in Paris. According to the agency, the crisis in Libya created a shortfall of 132 million barrels of crude oil at the end of May 2011.

It’s only the third time in the history of the IEA, created after the 1973 oil crisis, that such action has been taken. In fact, members used their strategic stocks after Iraq’s invasion of Kuwait in 1990 and again after hurricane Katrina struck the United States five years ago. In the face of such extraordinary events, the IEA temporarily authorizes a reduction in the stocking obligations for all its members.

The United States participated in this effort for a total of 50%, European countries for 30% and Asian countries for 20%. Most of the countries drew from their stocking agency. However, the French concentrated on strategic reserves held by the operators (some 5.9 million tonsnes) so that France contributed to a peak of 0.4 million tonnes “in proportion to its consumption, or 3.2 million barrels, corresponding to approximately 2% of French strategic stocks” specified in another official statement, Mr. Eric Besson, Minister for Energy.

So this decision had no impact on SAGESS since France only released strategic stocks held by operators, and not those owned by SAGESS.