The International Energy Agency (IEA) is to call for the release of 60 million barrels of oil in strategic reserves for one month to cope with consequences caused by Hurricane Katrina in the United States, the French Industry Ministry announced Friday.
"Hurricane Katrina has caused a major reduction in the production of crude oil and has led to a substantial reduction in US refining capacities in the Gulf of Mexico region," the ministry said in a statement.
The IEA, established in 1974 after the first oil crisis, seeks to coordinate energy policies among its 26 members states in order to avoid supply shocks. The Paris-based agency sets out requirements for governments to hold 90-day oil reserves under an accord with the Organization for Economic Co-operation and Development, with access to reserves restricted to emergencies such as natural catastrophes.
"The IEA, in conjunction with US authorities, believes that the damage done by this natural catastrophe could have repercussions on the international market for several weeks," said the ministry.
"In this regard, the executive director of the IEA (Claude Mandil) has decided to call on strategic reserves of member states at the level of 60 million barrels for a month, or two million barrels a day," the ministry said.
According to US government data, Hurricane Katrina has shut down an estimated 90 percent of crude production and 79 percent of natural gas output in the Gulf of Mexico, which accounts for a quarter of the total US oil output.