Member countries of the International Energy Agency (IEA) have agreed to release 120 million barrels of crude oil from their reserves, a development that is cooling global oil markets.
Half of these 120 million barrels of oil have already gone into the market being part of the United States’ contribution according to a Bloomberg report.
Last week, the US government announced that it would release 180 million barrels of crude oil into the market over the course of the year.
The release of crude oil from their stockpiles is in response to the refusal of sme OPEC countries including Saudi Arabia and the United Arab Emirate (UAE) to pump more oil into the market to augment shortages that came as a result of Western countries sanctions on Russia.
Though energy supplies were exempted, the sanctions have impacted Russian supply to the market due to payment difficulties.
The IEA agreed on March 1 to release 62 million barrels of crude oil from their collective stockpiles to cool oil prices which soared following the invasion of Ukraine by Russia and the ensuing sanctions on Russia by Western countries.
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The IEA last collectively released from their reserves in 2011.
Since the announcement that Western countries would be releasing crude oil from their stockpiles into the market, oil prices have shedded value, falling by 6 percent shortly after the US announcement.
Benchmark Brent sold at $101.90 on Wednesday and WTI crude fell below $100, trading down 4.83 percent on the day at $97.09 on the day.
Analysts say the downward pressure on crude oil prices would be temporary, absent any production hikes or demand curbs.
The IEA currently holds a collective 1.5 billion barrels in strategic reserves.
