World Faces `Oil Crisis;’ IEA Ready to Tap Reserves

(Bloomberg) — The world faces an “oil crisis,” and the International Energy Agency stands ready to release emergency stockpiles even as the biggest consumers discuss measures to contain spiraling demand, the agency’s chief said.

“Any major oil-plant accident can cause a supply disruption,” Executive Director Nobuo Tanaka said in an interview in Tokyo. “We at the IEA are monitoring the oil market and preparing ourselves to call for the release of strategic petroleum reserves at any time in the event of a major disruption.”


Consumption in China and India, the world’s fastest-growing major economies, has helped drive crude oil prices to “abnormally high” levels above $130 a barrel, Tanaka said. The U.S., Japan, and 25 other rich countries advised by the IEA have discussed stop-gap measures to reduce consumption, including lowering speed limits and restricting cars in cities, he said.

“We can call it an `oil crisis’ given the current price, and that it continues to climb even after global efforts to cut consumption,” Tanaka said. “We see a critical, structural issue in the global oil market, where supply growth isn’t catching up with demand.”

Bloomberg