My thoughts are with British citizens and those across the world affected by the events in the middle east of recent days. Since the conflict began, we have seen Iran target energy production and export infrastructure across the Gulf. Traffic in the strait of Hormuz, through which around 20% of global oil and liquefied natural gas is shipped, has declined very significantly, and the Iranian regime has issued reckless and unjustified threats to all ships using it. As a result, we are seeing significant disruption to international fossil fuel markets. While the UK’s energy supplies remain resilient and stable because of our diversity of supply, we are exposed to global oil and gas prices. This is yet another example of why we must end our reliance on volatile fossil fuel markets and switch to clean, home-grown energy. We are accelerating towards clean power by 2030, which will protect bill payers from future fossil fuel shocks and bring down bills.
Over the last week, I have had multiple meetings with the executive director of the International Energy Agency, with counterparts in the Gulf and the G7, and with our major UK oil and gas companies. The G7 Energy Ministers’ meeting and the exceptional IEA governing board on 10 March were crucial opportunities to assess security of supply and market conditions, and the response available to Governments.
Following the IEA governing board, and reflecting the global market conditions, members, including the UK, decided to take co-ordinated action to release emergency oil stocks. IEA members will release a total of 400 million barrels to the market. The UK will contribute the requested 13.5 million barrels, reflecting our share of oil consumption across IEA members.
The UK’s participation in this co-ordinated action demonstrates our commitment to the stability of global energy supplies and protecting consumers. This is an appropriate measure, taken alongside IEA partners, to protect bill payers and our economy while the situation in the middle east continues. Although co-ordinated action on an oil stock release is an important step towards stability, we are clear that ensuring the safe transit of tankers through the strait of Hormuz is the crucial enduring solution.
I would like to thank the IEA for its co-ordination and expert analysis, underlining its vital role in global energy security, and fellow IEA members for their allyship and collective resolve.
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