IEA meetings and ERE 9 exercise

On 26-27 June 2018 two representatives of the Emergency Oil Stocks Agency participated in meetings of the International Energy Agency (IEA) working groups in Paris - Standing Group on Emergency Questions (SEQ) and Standing Group on Oil Markets (SOM).

SEQ group is dedicated especially to the issues of preparedness of member countries for the emergencies in the area of crude oil, petroleum products, natural gas and electricity supplies. On the June meeting the IEA Secretariat presented time schedule of planned revision of basic oil stockholding obligation of member countries. This obligation in the amount of 90 days of average daily net oil imports currently does not respond to global situation that has changed since the 1970s when IEA was established. IEA presented also study on cost-benefit of stockholding, update of publication “Saving Oil in a Hurry” and decision on bilateral stocks in non-OECD countries.Emergency response review of Japan and mid-term reviews of Norway and Poland were also presented at the meeting.

The subject of the SOM meeting was in particular the current situation on the global oil and natural gas markets. Global crude oil demand will continue to grow by 1,4 million barrel per day (mb/d) to total level of about 100 mb/d in 2018. On the other hand the supply will grow mainly in non-OPEC countries, especially in United States. Within OPEC the crude oil production is declining in countries like Libya (caused by unrests), Venezuela (overall economic and political situation) and Iran (resumed economic sanctions due to nuclear program). These missing supplies will have to be compensated by increased exports especially from Saudi Arabia after OPEC and Russian Federation agreed on increasing of production limits that were lowered in the past 2 years with the aim to prevent global oil prices declining. Natural gas demand will continue to grow significantly in the next 5 years, while the biggest natural gas trade increase will be in the form of liquefied natural gas (LNG).

In the next days of 28-29 June 2018 the meetings were followed by Emergency Response Exercise ERE 9, which is organized by IEA every 2 years. Slovak Republic was represented by one representative of the Emergency Oil Stocks Agency. First phase of the exercise took place earlier this year in February in member countries, where communication systems and decision procedures were tested between IEA Secretariat and member countries, as well as between respective bodies within particular member countries. Second phase of the exercise consisted of meeting of delegates from member and partner countries in Paris and training of global oil disruptions solutions. There were 3 hypothetical disruptions scenarios presented and delegates divided into several smaller breakout groups had the task to discuss presented scenarios and propose a possible solution to the situations. Representatives of the groups subsequently presented the group outcomes and solutions on plenary meeting and discussion of all the delegates. Representative of the Emergency Oil Stocks Agency as one of the most experienced attending delegate was appointed by IEA as group leader and spokesperson of one of the breakout groups.