By Marcus Leach
The UK has joined its partners in the International Energy Agency (IEA) in releasing oil stocks to the market.
A total of 60 million barrels of oil will be made available for purchase over the next 30 days, with the UK contributing some 3 million barrels.
This will prevent short term supply disruptions leading to volatile oil prices that could damage the economy and threaten the global economic recovery.
Chris Huhne, Secretary of State for Department of Energy and Climate Change, said:
“This coordinated global action shows that both producer and consumer nations around the world are taking decisive steps to ensure enough oil is available. That’s why we strongly welcome Saudi Energy Minister al-Naimi’s statement earlier this month that Saudi Arabia and other Gulf countries will increase oil production to supply whatever the market needs.”
George Osborne, Chancellor of the Exchequer, said:
“I know that British families have been hit hard by the big jump in the world’s oil price. Events in the Middle East and North Africa have disrupted supply and contributed to the price spike. So we’ve been working closely with our international partners to take action with today’s release of oil stocks. It comes on top of the cut in fuel duty in the Budget, which means petrol is 6p a litre cheaper than it would otherwise have been.”
Violence in Libya and Yemen has disrupted the global supply of oil, and we expect the loss of Libyan production to continue for some time. As global oil demand increases over the summer it is vital that adequate volumes of oil are available at a price acceptable to both producer and consumer countries.
The UK welcomes recent commitments from Saudi Arabia and other Gulf states to increase production. This will help ensure there is adequate supply to meet demand. The stock release is designed to complement the actions of producer countries by making additional volumes of light crudes and refined products immediately available to the market.
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