STAVANGER, Norway, 24 August 2006 — The International Energy Agency would look to Iran’s fellow OPEC states to boost their oil output if Tehran were to turn off the taps in its nuclear dispute with the West, the IEA’s head told Reuters. The IEA, adviser to 26 industrialized nations, would prefer to see the Organization of Petroleum Exporting Countries exhaust its two million barrels per day (bpd) of spare capacity rather than tap the world’s emergency inventories.
“We are prepared for the possibility of releasing emergency supplies as always at the IEA,” the agency’s director general Claude Mandil said on the sidelines of an industry event in Norway. “But we think our strategic stocks are only for use in the case of real supply disruption, and after other possibilities have been exhausted, in particular OPEC spare capacity.”
OPEC President Edmund Daukoru said earlier this year that the group was unlikely to intervene if Iran — OPEC’s second largest producer — cut its oil exports. He said the group did not want to get dragged into a political dispute. Six world powers were studying Iran’s offer of more talks yesterday to determine if Tehran’s response went far enough to avert the threat of UN sanctions.
But there was no sign Tehran had agreed to a key UN Security Council demand that it freeze uranium enrichment by Aug. 31 or face the prospect of sanctions. Iran has called the deadline meaningless. Iran has sent mixed signals to oil markets as the dispute has developed this year. At times, officials have said it had no intention to cut its 2.4 million bpd of exports. But earlier this month its chief nuclear negotiator Ali Larijani warned the West not to “force us to do something that will make people shiver in the cold.”
The governments of the 26 IEA member countries own about 1.5 billion barrels of oil in strategic reserves, Mandil said. That would be enough to compensate for a loss of all of Iran’s oil exports for at least a year and a half, Mandil said. The IEA members also have access to another 2.5 billion barrels that could be used if necessary, he said. That would leave the world with no oil stocks and no cushion to meet any further supply disruption.