Energy consumers pledge ‘radical’ cutbacks in Russian imports

Major oil and gas consumers have pledged “radical” cutbacks in imports from Russia, the International Energy Agency said at the conclusion of its annual ministerial meeting.

All of the IEA’s 31 members—which includes the U.S., Japan and Germany—outlined individual polices and plans to immediately reduce their intake following Russia’s invasion of Ukraine, Executive Director Fatih Birol said at a press conference in Paris. He didn’t specify the intended cuts.

President Joe Biden will make an announcement “soon” on providing U.S. supplies of liquefied natural gas to help Europe break away from Moscow, said Energy Secretary Jennifer Granholm, who chaired this year’s IEA gathering. The crisis should accelerate the ongoing move away from fossil fuels to renewables, she said.

“Everyone was united in condemning, obviously, Vladimir Putin’s war, but also united in seeing how we can do what we can to increase supply, adopt security measures,” Granholm told reporters. Members were committed to “this transition to clean and how we can accelerate it as fast as we possibly can.”

Still, the measures may not be bold enough to please Ukraine, which called at the same event for Iran-style sanctions on Russian energy sales. 

Emergency Stockpiles

IEA members are also “immediately ready to react” with another release of emergency oil stockpiles if needed to fill any gap left by a consumer boycott of Russian barrels, Birol said. The nations announced the deployment of 63 million barrels at the start of this month, a small amount that has nonetheless given markets some reassurance. 

Oil prices remain volatile as traders weigh a de facto embargo on Russian shipments against continued purchases by China and India. Brent crude futures traded near $120 a barrel in London on Wednesday.

Despite Granholm’s prediction of a faster transition away from hydrocarbons, IEA members responded to the crisis on Wednesday with a measure pointing the other way. Germany’s ruling coalition agreed to cut the tax on fuel for three months by 30 euro cents ($0.33) for gasoline and 14 cents for diesel, as part of a 15 billion-euro package to ease the burden on businesses and households from soaring energy costs.