Release for consumption
The International Energy Agency (IEA) was created in response to the 1974 oil crisis as an independent organisation in the heart of the OECD. Its purpose is to co-ordinate member countries’ policies in the event of a disruption in the supply of crude oil and petroleum products, whether domestic or international. The IEA requires its members to maintain reserves equivalent to at least 90 days of oil imports.
If the IEA detects a supply crisis situation, it can promote collective action consisting of releasing a predetermined volume of oil reserves to the markets (this volume is calculated based on the specific situation) by each member country, in order to increase the supply of crude oil and products available. Each country can establish the way it implements the release for consumption.
Member countries may also favour establishing demand restraint measures, which would entail a reduction in consumption. Finally, countries with their own production can also increase their output if desired.
Previously there had been three collective actions carried out: 1991 (Gulf War), 2005 (Hurricanes Katrina and Rita) and 2011 (Arab Spring and Libyan conflict). In the case of Spain, these actions were implemented by releasing reserves of petroleum products held by the industry for consumption.
Given the growing instability caused by the war between Russia and Ukraine since the end of February 2022, the IEA has activated two Coordinated Response Plans that involve the release into the market of 60 and 120 million barrels (MBbl). Spain is contributing 2 MBbl and 4 MBbl, respectively, which will mean a reduction in the minimum security stocks obligation by regulated entities of 7.8 days. You can find more information here.
The EU also includes these actions in coordination with the IEA in its Directive 2009/119/EC.
Each IEA member country must have a National Emergency Strategy Organisation (NESO) that makes it possible for the government to react quickly in the event of a supply crisis, co-ordinating emergency operations with the industry.
Spain’s NESO is part of the Spanish emergency structure. Its ultimate responsibility lies with the National Security Council, according to Law 36/2015, of September 28, National Security. The Department of Homeland Security is the permanent consultative body that coordinates in the case of crisis to the relevant organisms.
In the event of a supply crisis, the Directorate General for Energy Policy and Mines, along with CORES, would have a relevant role in providing technical support for the implementation of specific measures and coordinating the necessary actions with operators.
