Oil security remains the cornerstone activity of the International Energy Agency (IEA). Since its foundation in the aftermath of the 1973-74 oil crisis, the IEA has enhanced, refi ned and strengthened its emergency response mechanisms to off set the impacts of short-term oil supply disruptions. The co-ordinated response carried out after Hurricane Katrina hit the Gulf of Mexico (August 2005) showcases the ability of the IEA to respond eff ectively and decisively to an oil supply shortfall.

Today’s oil market is particularly susceptible to an oil supply disruption; the delicate balance of supply and demand is maintained with very little margin for error. Spare capacity, both upstream and downstream, is limited, resulting in the potential for relatively small outages of supply – whether from severe weather, accidents or geopolitical crises – to have signifi cant impacts. Oil demand growth in developing countries and increased dependency on a shrinking number of producing countries exacerbate market tightness. Th e need for strategic emergency response mechanisms has never been greater.

This publication, Oil Supply Security: Emergency Response of IEA Countries 2007, is the fruit of another cycle of rigorous reviews of member (and accession) countries’ emergency response mechanisms. These reviews help countries improve and update their capacity to react quickly and eff ectively to off set the consequences of oil supply disruptions and to participate fully in an IEA collective response to a major oil supply shortfall.

It also gives insight into stock levels that can be used to cope with supply disruptions. Currently, IEA member countries’ stocks stand at 4.1 billion barrels, compared to 3.6 billion barrels in early 2000. At that time stock coverage was at an all time low of about 108 days of net imports, compared to 122 days in 2007.

In response to the rapid increase of oil consumption and net imports in some non-member countries, the IEA has pursued dialogue and information sharing with key transition and emerging economies on topics such as oil security policies and the creation of national strategic oil stocks. Accordingly, this publication includes overviews of how China, India and countries of the Association of Southeast Asian Nations (ASEAN) are progressing with domestic policies to improve oil supply security, based on emergency stocks.

Nobuo Tanaka
Executive Director, International Energy Agency

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EXECUTIVE SUMMARY
Th e International Energy Agency (IEA) was founded in 1974 with the mandate to implement the International Energy Program (I.E.P.) – a joint strategy to address oil security issues on an international scale. At that time, 16 countries from the Organisation for Economic Co-operation and Development (OECD) signed the I.E.P. Agreement as a response to the international oil disruption of 1973, and to the wide-ranging macro-economic problems it generated.

Emergency response is still one of the main pillars of the IEA. Becoming a member of the IEA is contingent on countries being members of the OECD and meeting two key obligations: to hold oil stocks equivalent to at least 90 days of net oil imports; and to maintain emergency response measures that can contribute to an IEA collective action during a severe oil supply disruption.

Response measures include stockdraw, demand restraint, fuel switching, surge oil production and, if necessary, sharing of available oil supplies. Since the IEA was founded, member countries have taken a number of subsequent decisions that provide signifi cant fl exibility as to how and when the IEA responds to a sudden disruption of supplies.

The IEA Governing Board, a body comprising representatives at ministerial or senior official level, defi nes and determines the implementation of IEA policies. Under the Governing Board, standing groups carry out sectoral analysis, policy review and other operations as necessary. One of these groups, the Standing Group on Emergency Questions (SEQ), is responsible for all aspects of the emergency response. To ensure it considers the full range of related issues, the SEQ takes advice from the Industry Advisory Board (IAB), which is composed of experts from oil companies operating worldwide.

As part of its mandate, the SEQ conducts regular reviews (on a fi ve-year cycle) of the emergency response mechanisms of member countries, thereby ensuring IEA overall preparedness for a rapid response to oil emergencies. Th ese reviews also help to verify that emergency response strategies have adapted adequately to changes in oil market conditions. ...

Visit The International Energy Agency (IEA) Website

The International Energy Agency (IEA) is an autonomous body which was established in November 1974 within the framework of the Organisation for Economic Co-operation and Development (OECD) to implement an inter national energy programme.

It carries out a comprehensive programme of energy co-operation among twenty-seven of the OECD thirty member countries. The basic aims of the IEA are:

• To maintain and improve systems for coping with oil supply disruptions.
• To promote rational energy policies in a global context through co-operative relations with non-member countries, industry and inter national organisations.
• To operate a permanent information system on the international oil market.
• To improve the world’s energy supply and demand structure by developing alternative energy sources and increasing the effi ciency of energy use.
• To promote international collaboration on energy technology.
• To assist in the integration of environmental and energy policies.

The IEA member countries are: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Republic of Korea, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States. Poland is expected to become a member in 2008. The European Commission also participates in the work of the IEA.

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