IEA urges Asian countries to lift strategic oil reserves

The International Energy Agency is urging East Asian and Asean countries to beef up oil reserves to ease the impact of oil price volatility, deputy director William Ramsay told a seminar in Bangkok yesterday.

Since oil prices fluctuate with supply, unexpected disruptions can cause prices to quickly shoot up, he said.
Oil reserves in East and Southeast Asia now stand at 30 days, five times lower than in IEA member nations, putting them at risk of a supply shortage. Energy security has been of high concern since the 1970 oil shock, he said.

“Since the oil shock, the whole world has been stringent in securing oil stocks as a preparation for emergency,” Mr Ramsay said. “But it is not enough for the situation these days, as the market is very much sensitive to supply.”

Rapidly rising energy demand in emerging Asian countries, especially China and India, has increased commodity prices in global markets.

Mr Ramsay said China and India would become the world’s largest net importers of crude at about 18 million barrels a day in 2030, up from six to seven million barrels per day in 2005.

Bangkok Post