Half of that total – 30 million barrels – will come from the US Strategic Petroleum Reserve, and the other half will come from allies in Europe and Asia. These other allies include Germany, the United Kingdom, Italy, the Netherlands, and other major European countries, as well as Japan and South Korea.
The International Energy Agency announced on Tuesday that member states agreed to release emergency reserves to send a “strong message to global oil markets that there will be no shortages” as a result of Russia’s invasion of Ukraine.
In its own statement, the White House said the release “is another example of partners around the world condemning Russia’s unprovoked and unprovoked invasion of Ukraine and working together to address the impact of President Putin’s chosen war.”
“President Biden has been clear from the start that all tools are on the table to protect American businesses and consumers, including from price hikes at the pump,” the White House said in a statement.
The oil market was not immediately affected. US crude rose about 10% on Tuesday morning to an intraday high of $105.14 a barrel. This is the highest level since 2014. Brent crude, the global benchmark, rose about 8% to $105.40 a barrel.
“The bottom line is that this is not enough to calm the market. It kind of helps,” said Michael Tran, managing director of global energy strategy at RBC Capital Markets.
“You need to get the numbers up,” said Robert Yauger, vice president of energy futures at Mizuho Securities.
The invasion of Ukraine has raised concerns about supply disruptions from Russia, the world’s second-largest oil producer. Brent oil prices closed above $100 a barrel on Monday for the first time since 2014.
High oil prices have pushed prices at the gas pump to their highest in seven years. The national average for regular gasoline rose to $3.62 on Tuesday, up about 9 cents a week and 24 cents a month, according to the AAA. At some point, energy prices can become so expensive that they erode consumer demand and slow the broader economy.
“We are actively working with countries around the world to assess the collective release of strategic petroleum reserves for major energy consuming countries. The United States will release additional barrels of oil as circumstances warrant,” he said.
Mike Wirth, CEO of Chevron, on Tuesday expressed support for governments to release emergency stocks of oil to offset supply concerns raised by Russia’s invasion of Ukraine.
“I think a coordinated response from several countries can help in the short term,” Wirth said in response to a question from CNN during a press briefing. “Certainly, we have seen the markets on edge with concern about supply and supply reliability.”
Wirth was confident that there would be no major disruption to supplies.
“I haven’t seen anything to suggest that Russia’s intentions, or the intentions of governments involved in sanctions, would be to restrict oil supplies,” Wirth said. “In fact, quite the opposite. It seems to me that people have been very keen to point out that their intent is to try to conserve energy supplies for a world that needs it.”
But it is not a long-term solution. There is a limited amount of oil in emergency reserves. In fact, the Strategic Petroleum Reserve contains the least amount of oil since September 2002, according to government statistics.
Matt Smith, chief US oil analyst at Kpler, said the contingency issues were arguably optimistic from a market sentiment standpoint.
“Every time the United States announces a release from the Strategic Petroleum Reserve, there is less bullet that they should be able to use later,” Smith said.
This story has been updated with additional reports.