New Zealand supports global action to ease pressure on global fuel prices
The Energy and Resources Minister Dr Megan Woods has joined her International Energy Agency (IEA) counterparts to condemn Russia’s invasion of Ukraine and agreed to measures to ease uncertainty about what it means for global energy supply and prices.
Megan Woods took part in a special meeting of Energy Ministers from the 30 member countries of the Agency IEA in the early hours of this morning.
Dr Woods agreed to contribute to a voluntary release of 60 million barrels of oil from global emergency stocks held by IEA members to ease uncertainty in the market. A process is now underway to determine what voluntary contributions member countries can make.
Members of the IEA are required to hold stocks equivalent to at least 90 days of net oil imports. New Zealand buys emergency reserve stocks that are held offshore so it can contribute to stabilisation of world energy markets.
Dr Woods says world oil prices reached an eight year high of 105 US dollars per barrel in the last couple of days, adding inflationary pressures to a global economy which has already taken a hammering from COVID.
“Russia has used its position as the third largest crude oil producer in the world and the second largest oil exporter to weaponise energy, withholding oil and gas supplies to Europe in the months before the invasion contributing to pushing up oil and gas prices,” Megan Woods said.
“This crisis highlights the need to transition away from a reliance on fossil fuels, not only to meet our climate change requirements, but also to ensure future world energy security.
“In the immediate term, this collective action by IEA countries will ensure there is less volatility in oil prices, as a result of the market impact from Russia’s invasion of Ukraine,” Megan Woods said.
In addition to the commitment to release oil stocks, each member country is encouraged to do its utmost to prioritise Ukraine in oil products supply, and reinforce global dialogue with gas producing countries to ensure secure, affordable and reliable gas supplies, including LNG.
Note to Editors
The IEA was established in the early 1970s in response to the global oil price crisis, with members required to hold 90 days of domestic oil consumption as emergency stocks. This is only the fourth time in the IEA’s history that such a release has been made with the last drawn down of emergency stocks taken in 2011 in response to the Libyan crisis.