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New IEA head rules out oil reserves use to lower price
September 7, 2011 / 7:51 PM / 6 years ago

New IEA head rules out oil reserves use to lower price

PARIS (Reuters) - The International Energy Agency (IEA) will release emergency oil reserves only in case of a supply disruption and not to help the economy or lower prices, its new executive director said on Thursday.

Maria van der Hoeven, a former Dutch economy minister who started at the IEA on September 1, also said the agency’s release of oil from its emergency reserves in June was a success and there was no plan for a further move.

“It is an answer to a supply disruption and it ought to be an answer to a supply disruption,” Van der Hoeven told Reuters in an interview, referring to the purpose of the IEA reserves, adding they should not be used to lower oil prices.

The IEA’s 28 members are required to hold stocks equal to 90 days of their consumption. Its decision in June to release 60 million barrels, in the wake of the loss of Libya’s oil exports due to civil war, was the third in the agency’s 37-year history.

“You do it for the right reason, and the right reason is always to have a solution for a disruption of supply,” van der Hoeven said in an interview in her office at the IEA’s headquarters overlooking the landmark Eiffel Tower in the French capital. “That’s what it’s intended to be.”

She dismissed a widespread perception at the time of the IEA release that the agency had acted to protect industrialized countries from rising oil prices, saying a change of remit had not occurred. “I wasn’t there when the debate was going on, but definitely not,” she said.

Brent crude oil hit a 2011 high of $127.02 a barrel in April and was trading around $114 on Wednesday. The IEA has repeatedly said this year oil prices pose a threat to growth, saying oil’s rally above $90 imperil global economic recovery.

RELATIONS WITH OPEC, OTHERS

Van der Hoeven, 61, who succeeds Nobuo Tanaka of Japan as IEA chief, aims to foster the agency’s relationship with the Organization of the Petroleum Exporting Countries which was strained over the stocks release.

She will be traveling to OPEC’s headquarters in Vienna on Thursday to meet its Secretary General Abdullah al-Badri.

“It’s fairly important that we have an open and transparent relationship with producing countries, not only on oil but on gas as well. It’s necessary,” the former teacher and education minister said.

In a three-year stint as Economy Minister van der Hoeven met OPEC ministers at various times to discuss energy issues and observers who know her say she has excellent contacts with OPEC ministers.

As China and India emerge as the big oil users of the future and as demand in the United States, still the world’s biggest gasoline guzzler, levels off, the IEA aims to build closer ties.

But India and China will not join the IEA in the near future as they are not members of the Organization for Economic Cooperation and Development (OECD), she said.

“But, on the other hand it’s very important to have them associated with the IEA and to have joint working programs with those countries,” she added.

While van der Hoeven will seek closer ties with emerging countries and producers, the IEA’s interests remain uppermost.

“My mandate is not Maria van der Hoeven, it’s 28 countries being together, the IEA,” she said.

Editing by James Jukwey

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