The International Energy Agency is concerned about current high oil prices, but did not see the need for any release of strategic stockpiles as the market is well supplied despite supply outages in Libya, the group’s head said on Tuesday.
Supply outages from Libya and concerns the escalating situation in Syria could spill into other Middle East countries pushed up prices for international benchmark Brent to a six-month peak above $117 per barrel late last month. But Brent dropped to a one-week low below $113 on Tuesday.
Supply fears abated on Tuesday after Russia offered to help put Syria’s chemical weapons under international control, calming fears of an imminent strike against the country.
“What we have seen this morning, the price came down again. This is of course a good sign. We always monitor prices and we are very concerned about prices,” IEA Executive Director Maria van der Hoeven told reporters in Tokyo, where she was attending the Second LNG Producer-Consumer Conference.
“We can also see that the market is sufficiently supplied and that the price has to do with the risk premium.”
Asked if the IEA, which advises 28 industrialised countries on energy policy, is prepared to release oil jointly, she said: “No. We always monitor the situation. At this moment, we can see that the market is sufficiently supplied, and we have seen the prices coming down.”
The IEA comprises OECD countries that hold strategic inventories which can be released in the event of a supply disruption in oil markets. In 2011, the IEA coordinated an effort by member states to release emergency stocks in response to disruptions caused by the civil war in Libya.
Analysts have warned that oil prices could spike if violence in Syria spills over into the region’s oil producing countries.
No deal has yet been reached between Libya’s government and tribal mediators and various protest groups who have paralysed its oil production since end July, Saad Bin Sharada, head of the country’s government energy committee said on Monday.
Last week, Libya’s oil output hit a post-war low of just 150,000 barrels per day compared to its capacity of 1.6 million bpd. Exports have fallen to just 80,000 bpd from just two offshore platforms.
Information from Reuters was used in this report.