Strategic petroleum reserves: G7 to release 100 million barrels through IEA
G7 leaders agreed on October 2 to release 100 million barrels of crude and diesel from emergency reserves over four months through the International Energy Agency (IEA), with a substantial diesel release in the first 20 days. The release carries out commitments under the IEA's 400-million-barrel collective action of March 2026. Members reaffirmed no energy export curbs among themselves.
Syllabus: Prelims · Current Affairs & IR; GS3 · Infrastructure; GS2 · Foreign Policies & the Diaspora
Why it matters
Diesel runs trucks, tractors and harvesters, so a shortage soon raises the cost of food and of everything moved by road. Emergency stocks exist for such moments: oil stored in advance is put on the market to cover a sudden gap in supply. The IEA says this is meant for short-term disruptions, not for price intervention. For India, which depends on imported crude oil, the episode is a reminder of its own cushion. The three strategic caverns can meet about 9.5 days of national demand, by the Petroleum Ministry's estimate; oil companies' stocks covered 64.5 days more in 2021. IEA members must hold stocks for 90 days of net imports, commercial stocks included. The caverns store crude oil, which has to be refined before it becomes diesel.
Prelims pointers
- International Energy Agency (IEA): created in 1974 after the 1973-74 oil crisis; an autonomous agency hosted at the OECD in Paris; a candidate member must belong to the OECD.
- IEA stock obligation: stocks equal to at least 90 days of net oil imports, held as government, agency or obligated industry stocks; net exporters Canada, Mexico and Norway are exempt.
- G7: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States; the European Union takes part; it has no permanent secretariat and its presidency rotates yearly.
- India and the IEA: Association country since March 2017; Framework for a Strategic Partnership signed on January 27, 2021; formal request for full membership in October 2023.
- ISPRL (Indian Strategic Petroleum Reserves Limited): a special purpose vehicle wholly owned by the Oil Industry Development Board, under the Ministry of Petroleum and Natural Gas.
- Release and refilling of India's strategic crude oil during a supply disruption is coordinated through an Empowered Committee of the Government of India.
- Strait of Hormuz: lies between Iran and Oman; links the Persian Gulf with the Gulf of Oman and the Arabian Sea; carried about 25% of seaborne oil trade in 2025.
- US Strategic Petroleum Reserve: federally owned crude oil kept in underground salt caverns at four sites on the Gulf Coast of Texas and Louisiana; authorised capacity 714 million barrels.
Practise a UPSC-style question
With reference to the International Energy Agency (IEA), consider the following statements:
1. It was created in 1974 in response to the oil crisis of 1973-74.
2. It is an autonomous agency whose secretariat is located in Vienna, Austria.
3. A country must be a member of the Organisation for Economic Co-operation and Development (OECD) to become its member.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Show the answer
Answer: (c) 1 and 3 only
1 is correct: the IEA was created in 1974 in response to the oil crisis of 1973-74, with a mandate for the security of oil supply. 2 is incorrect: the autonomous agency is hosted at the OECD in Paris, not in Vienna. 3 is correct: a candidate country for IEA membership must be a member country of the OECD.
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