IEA Finds Members Well Prepared For a New Oil Shock, But Warns of Challenges to Future Energy Security

Oil-importing nations are well prepared to respond to a sudden disruption of world supplies, the Paris-based International Energy Agency, said in a major study published today. But rapidly growing demand over the next two decades, coupled with a foreseeable reduction of supply from non-OPEC producers, will present consumers with sharp new challenges. The prospect is for a world in which IEA Member countries will become more and more dependent on supplies from a small number of countries. Furthermore, IEA stocks as a proportion of imports have fallen steeply since the 1980’s.

“Our Members have done an excellent job in preparing and refining their emergency response procedures,” said Robert Priddle, the IEA’s Executive Director in presenting Oil Supply Security: The Emergency Response Potential of IEA Countries in 2000. “But,” he added, “there are new problems on the horizon, which we shall have to face. As we have said before, there is no room for complacency.” Oil Supply Security 2000, the latest edition of a report published by the IEA every five years,
indicates that IEA Member countries are quickly able to respond to supply disruptions, both individually and collectively. Most of the Agency’s 25 Member countries hold oil stocks well above the 90 days of net oil imports to which they are committed. They also have strong legislative frameworks and administrative structures. Along with an overview of the Agency’s emergency response potential, the book contains detailed country-by-country analyses for the 25 Member countries and the candidate
countries Poland, Korea and the Slovak Republic. In each case, an assessment is made of the principal emergency response measures: stockdraw, demand restraint, fuel switching, extra
fuel production and the sharing of oil supply.

The IEA was founded in 1974, in the wake of the first oil crisis, when production cuts caused oil prices to triple within a matter of weeks and embargoes produced severe shortages in the
United States and the Netherlands. The IEA’s core mission, embodied in the International Energy Program, is to promote a secure supply of energy at affordable prices.