IEA studies oil options

October 2, 2001 Posted: 1146 GMT

LONDON (Reuters) -- The International Energy Agency is planning for a possible disruption of Middle East oil supplies but has no immediate intention of releasing oil from its strategic stockpiles, a spokeswoman said Tuesday.

The Paris-based agency's emergency response team is drawing up scenarios in case of a disruption caused by allied military action, the spokeswoman said.

The agency, representing 31 industrial nations, requires its members to hold stocks worth at least 90 days of imports and can order a release in the event of supply disruptions. "It is quite normal that the agency re-examine our responses given potential events. We did it for Y2K and nothing happened," the spokeswoman said.

She was responding to a report in The Wall Street Journal, which said the IEA was preparing to intervene immediately and release oil, perhaps as much as 2 million barrels a day, if oil markets became turbulent after any U.S. action in the Middle East.

"This is one possible scenario," said the spokeswoman. "It is contingent upon our emergency response team to be prepared."

Oil traders for the large part have discounted the possibility of any serious disruption to Middle East supplies in the wake of the Sept. 11 attacks on the United States. There are some concerns that Iraq, supplier of about 2 million barrels a day out of 76 million worldwide, might be targeted.

The state Jordanian news agency Monday quoted President Bush as

Having told Jordan's King Abdullah the United States would not attack any Arab country, including Iraq, in revenge.

But U.S. Secretary of State Colin Powell said later that Bush had not ruled out an attack on Iraq, regarded by Washington as a state sponsor of terrorism, as part of later phases of a military campaign.

Oil prices jumped right after the attacks on fear of supply disruptions but have slumped since due to sluggish demand. Crude oil has tumbled about $6 a barrel, or 22 percent, since then, and the benchmark Brent blend of crude lost 38 cents to $22.68 Tuesday in London.

Following last week's OPEC meeting the IEA released a statement saying world oil markets were "well supplied." Set up in 1974 after the Arab oil embargo, the IEA has only released emergency stocks once, to fill lost supplies after Iraq invaded Kuwait in 1990.

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