Twenty-eight countries have agreed to release 60 million barrels of crude oil to the market to offset disruptions prompted by Libya's war and stave off a possible spike in energy prices, the International Energy Agency announced Thursday.
The Paris-based agency warned that the release was in response to an "imminent threat of shortfall," according to Executive Director Nobuo Tanaka, which could undermine the nascent global economic recovery.
"Today, for the third time in the history of the International Energy Agency, our member countries have decided to release stocks," he said.
The release was a pre-emptive move to prevent a sudden spike in prices like the one in 2008, which helped set off a global increase in food prices as well, Tanaka said.
The 60 million barrels is a mere fraction of the more than 4 billion barrels of reserves held by the IEA. Tanaka said allocation of the oil will be by member consumption, with the United States providing half, Europe 30 percent and members in Pacific Ocean the remaining 20 percent.
The IEA statement said the normal increase in demand over the summer "will exacerbate the shortfall further" and that pledges by oil producers to boost ouput will take a while to have an effect.
"Our stock is intended to compliment the actions of these key producers, bridging this gap and removing the risk of any short term shortages as demand rises," added Tanaka.
The 28 members of the IEA _ mainly oil-importing countries in Europe _ will make 2 million barrels a day available from their emergency stocks over an initial period of 30 days.
Months of fighting in Libya have removed 132 million barrels of light, sweet crude oil from the market by the end of last month, the agency estimated.
Oil prices tumbled to below $93 a barrel on Thursday due to concerns that U.S. economic growth and crude demand will weaken this year. Strong demand from emerging markets helped crude rise to almost $115 early last month. Demand growth in China, the world's second-largest oil consumer, remains robust but has slipped slightly in recent months.