IEA meetings and workshop on change of the IEA stockholding obligation

On 27-29 November 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).

Meetings of the working groups were preceded by workshop of the SEQ delegates aimed at reevaluation of the basic stockholding obligation of IEA member countries to keep emergency stocks of crude oil and petroleum products. The IEA intends to reform the stockholding obligation, which would include also net exporting member countries. The objective of the reform should be assurance that IEA remains important organization able to resolve global oil disruptions through its emergency oil stocks. IEA secretariat presented to the delegates 4 elaborated options of system change and aim of the workshop was to discuss these options as a basis for further IEA Governing Board decisions. None of the presented options represents significant change of the Slovak Republic’s stockholding obligation and the Slovak Republic will fulfill its obligation towards IEA in case of adoption of whatever option without need to implement major changes to our emergency stocks system.

Subject of the SEQ meetings was mainly issues of preparedness of member countries for the emergencies in the area of crude oil, petroleum products, natural gas and electricity supplies. Part of the SEQ meeting was also summary of the Mid-term emergency response review of the Slovak Republic. Mid-term review consists of presentation of the recommendations from the Emergency response review that took place in Slovak Republic in 2015 and evaluation of the recommendation’s implementation progress. Slovak delegates presented current stage of the recommendation’s implementation or plans for their future implementation. After the presentation Slovak delegates answered supplementary questions from Czech Republic, Poland, Austria and European Commission delegates.

The SOM meeting was as usual dedicated mainly to current situation on the global oil market. Main topic on the oil markets these days is sharp fall of crude oil prices from 86 US dollars per barrel to 58 dollars in the course of past 6 weeks. Total oil demand in the world will rise by about 1.3 million barrels per day in 2018 and by 1.4 million barrels per day in 2019. The supply from the producing countries is growing mainly in Russian Federation, Saudi Arabia and United States - production in these countries rose by about 2 million barrels per day since May 2018. Production in United States and Russia is reaching all-time records, but an agreement between Russia and OPEC countries on production cuts is expected in near future. Ultimately the supply is expected to be more than adequate to cover the demand in 2019, in spite of production disruptions in Iran and Venezuela.