IEA rules out release of strategic reserves

New Delhi: Saudi Arabia and other Middle East oil exporters can be relied on to meet rising oil demand and there is no need for the release of crude from emergency reserves, according to the head of the International Energy Agency.

"Saudi and other Gulf countries said to the world that they will meet demand if demand is there," Maria van der Hoeven, executive director of the IEA, said yesterday on the sidelines of a conference in New Delhi. "They are reliable suppliers."

The Paris-based agency coordinated the release of 60 million barrels of crude and oil products in June after Libyan output was disrupted by the uprising against Muammar Gaddafi, sending prices higher. The IEA also made supplies available during the 1991 Gulf War and after Hurricane Katrina struck rigs and refineries in the Gulf of Mexico in 2005.

Price factor

Another release of strategic reserves is not warranted at the moment, van der Hoeven said. "Stock releases are about disruption of supplies and there is no disruption of supplies," she said.

Oil prices are at a "high level", which is having an impact on the recovery of economies, she said. Brent crude has gained 15 per cent this year to about $123 a barrel on concern that a conflict between the West and Iran over the latter's nuclear programme may disrupt shipments from the Middle East.

Saudi Arabia can increase crude production by as much as 25 per cent immediately if needed, oil minister Ali Al Naimi said last week, seeking to allay the concern over supplies that has driven prices to the highest in three years.

The country has excess capacity of 2.5 million barrels a day, the minister said.