The International Energy Agency (IEA) is set to propose releasing 400 million barrels of oil, the largest drawdown in its history, to help curb surging crude prices amid the U.S.-Israeli conflict with Iran, reports said on Wednesday.
The release would be spaced over at least two months, Reuters reported, citing sources, while Spain's energy minister said countries would have up to 90 days to release that volume.
Three sources said the Paris-based IEA would publish its recommendation at 1300 GMT on Wednesday, ahead of a 1400 GMT meeting of G-7 leaders chaired by France.
In 2022, IEA member countries released 182.7 million barrels over two months, which was then the largest in IEA history, when Russia launched its full-scale invasion of Ukraine.
"I would say it is the largest proposal in the history of the International Energy Agency," said Sara Aagesen, Spain's energy minister.
"During the war in Ukraine, they were talking about releasing around 182 million barrels, and now it's an amount that is more than double their proposal," she added.
Western economies coordinate their strategic oil stockpiles through the IEA, which was formed after the 1970s oil crisis.
French President Emmanuel Macron is due to chair the meeting of G-7 leaders later on Wednesday after the bloc said its energy ministers supported the use of reserves.
"In principle, we support the implementation of proactive measures to address the situation, including the use of strategic reserves," the G-7 energy ministers said.
One G-7 source told Reuters that although no country currently faced a physical shortage of crude, prices were rising sharply, and leaving the situation unattended was not an option.
However, any actual release cannot start immediately because decisions on aspects such as country allocations and timing require further discussion, the source said.
"The IEA secretariat is expected to propose scenarios, based on expected market impact, and outreach may extend to non-IEA members like China and India," the source said.
IEA member South Korea is participating in the discussion "and reviewing its position," a spokesperson for the country's industry ministry said on Wednesday.
Oil prices rebounded on Wednesday as markets doubted whether the IEA's reported plan for the record release of oil reserves could offset potential supply shocks from the U.S.-Israeli conflict with Iran.
