00:01 Julie
Breaking news, the International Energy Agency did approve its largest ever release of emergency oil reserves. IEA member states are going to release 400 million barrels. Um, governments trying to mitigate this spike that we’ve seen in oil prices. It there, it was reported upon earlier this morning that it could be 300 to 400 million. Now we have that confirmation. Yahoo Finance’s Jake Conley has been tracking all of the developments very closely that have been going on. Okay, so largest release ever across a number of different countries.
00:44 Jake Conley
And more than double what you saw released in 2022 after the Russian invasion of Ukraine, which was about 180 million barrels. So this is a massive, massive release. That said, we are still going to be far below all the barrels that have taken off the market.
01:01 Julie
Okay, so let’s do a little math then. How how much has that decrease been because oil can’t get out of the straight or who move.
01:10 Jake Conley
So that’s pegged depending on where you look around 18 million, 20 million barrels per day.
01:15 Julie
Per day.
01:16 Jake Conley
Per day. And so
01:17 Julie
And so now we’re talking about this 400 million being released.
01:21 Jake Conley
If you do the math, it’s roughly 2 million barrels per day. If you assume kind of a normal distribution schedule.
01:29 Julie
And this is going to happen over time. They don’t just like release it all onto the market.
01:31 Jake Conley
No, this is not 400 million barrels hitting the market tomorrow morning. This is usually a, call it six-month kind of roll out, um where the member countries will slowly release from their reserves and do that at a steady pace, partially so that you don’t flood the market.
01:50 Julie
Right. Okay. So when we’re looking at oil prices in reaction to this, you know, normally, your brain says, okay, more supply, that means prices are going to come down a little bit. And yet that is not what is. I mean, part of it is this was perhaps anticipated.
02:13 Jake Conley
Mhm.
02:14 Julie
Um,
02:14 Jake Conley
Some of it’s priced in.
02:15 Julie
Some of it’s priced in. But at the same time we’re getting this these headlines this morning. We’re still getting headlines that there are attacks on ships
02:23 Jake Conley
Three more this morning.
02:23 Julie
in the straight of Hormuz. So that then maybe seems like, I mean, but the swings have been so wild anyway, from day-to-day, they don’t necessarily make sense depending on what the actual headlines are.
02:41 Jake Conley
Yeah, I think that’s right. And traders are also looking at this from both sides. Sure, there’s more oil coming on. You’re also not getting a fix for the flows. That’s what really you need to watch here. Can oil globally move? It’s great that there’s going to be another 400 million barrels in the market. That will help somewhat. It will bring prices down somewhat, but the main variable here is still the blockade out of the Persian Gulf. If you cannot get that oil onto a tanker and get it out safely through the straight, you’re still going to be sitting at a at a drawback. and even now you see Saudi Arabia trying to push some of its oil through pipelines to the East West, to the Red Sea. It’s still not enough to compensate for what is the single biggest choke point in the world for oil.
03:32 Julie
Yeah. All right, Jake, thank you very much. I know that you will be keeping very busy.
03:36 Jake Conley
Thanks, Julie.
03:37 Julie
as you have been. Appreciate it.
