Paris - AFP
International Energy Agency countries led by the United States are to draw down 60 million barrels from strategic oil stocks to make up for the loss of Libyan output, the IEA said on Thursday. The drawdown, only the third in the history of the IEA, was intended to complement \"expected increases in output\" by the major oil producing countries, the IEA said in a statement. A combined 2.0 million barrels per day would be taken from the stockpiles of the 28 IEA member states, it said, warning that Libyan supplies could be largely cut off until the end of the year. In a separate statement, the US Department of Energy said that of the total, it would release 30 million barrels from its stocks, which at 727 million barrels, were at a historic high. The DoE said it would monitor the situation and stood \"ready to take additional steps if necessary.\" \"This supply disruption has been underway for some time and its effect has become more pronounced as it has continued,\" the IEA said in a statement. \"Today, for the third time in the history of the International Energy Agency, our member countries have decided to release stocks,\" IEA executive director Nobuo Tanaka said. The shortfall would worsen as seasonal demand was expected to rise during the coming summer in the northern hemisphere, the IEA warned. Libyan supplies have dried to a trickle since unrest against the regime of Moamer Kadhafi began and a coalition of NATO and some Arab countries began air strikes against government forces to protect the civilian population. \"IEA members agreed to make two million barrels of oil per day available from their emergency stocks over an initial period of 30 days. \"Leading up to this decision, the IEA has been in close consultation with major producing countries, as well as with key non-IEA importing nations.\" The announcement came shortly after oil prices fell sharply owing to new data pointing to unexpectedly weak global economic activity, a downturn then compounded by the IEA statement. In afternoon trade, the New York benchmark oil contract was down more than $5 dollars, extending early losses. The IEA is the energy arm of the Organisation for Economic Cooperation and Development. It was set up in response to the oil shocks of the 1970s and now has 28 members among advanced economies. Total oil stocks in IEA countries amount to more than 4.1 billion barrels and of this nearly 1.6 billion barrels is in the form of public stocks exclusively for emergencies, the IEA said. IEA net oil-importing countries have a legal obligation to hold crisis reserves of 90 days of net oil imports and stocks were currently at 146 days of imports, the statement noted. The IEA said it estimated that \"the unrest in Libya had removed 132 million barrels of light, sweet crude oil from the market by the end of May.\" Despite \"huge uncertainties (analysts agreed) that Libyan supplies will largely remain off the market for the rest of 2011.\" In this light, the IEA said it \"warmly welcomes\" the announced intentions by major oil producing countries to increase production but this would take time. The world economy was still recovering and \"the threat of a serious market tightening, particularly for some grades of oil, poses an immediate requirement for additional oil or products to be made available to the market,\" the IEA said.