PARIS (Reuters) - The International Energy Agency said on Thursday it was closely monitoring a pipeline outage that has halted a fifth of U.S. crude imports and added over $3 to oil prices.
The IEA, which advises 26 industrialized nations, can tap its members’ emergency reserves to prevent a global energy crisis.
Lawrence Eagles, head of the IEA’s oil and industry markets division, said it was too early to say how much of an impact the incident will have on the market.
An explosion hit a main pipeline that supplies Canadian crude to U.S. Midwest refineries on Wednesday, forcing operator Enbridge Inc to shut down four of its main pipelines.
“With any supply issue, we always monitor what is going on,” But we have to have a better understanding of what the issue is at this point in time before making any comment,” he said.
“You have to look at whether there are opportunities for re-routing supplies...and how long it’s going to take for repairs,” he added.
The pipeline carries an estimated 1.9 million barrels per day of Canadian crude to the United States, equivalent to about 9 percent of total U.S. oil demand.
The last time the IEA released some of its emergency reserves was at the end of 2005 in the wake of Hurricane Katrina which devastated U.S. Gulf of Mexico oil production.
That release included refined oil products. A need for crude oil alone would most likely be met from U.S. strategic stocks.
The IEA, created after the 1973-74 oil crisis, requires member countries to hold stocks of at least 90 days of net imports.
But a continued rise in oil demand, an increased concentration of the remaining oil reserves in fewer countries, and a lack of upstream and downstream capacity additions are forcing the IEA to mount its preparedness in case of a crisis.
In a report released before the pipeline explosion, the IEA said it stood ready for the growing risk of oil supply disruptions.
“The risk of oil supply disruptions has grown in recent years and will grow in the near future,” it said in a new publication on oil supply security. “But the IEA stands prepared.”
Oil stocks in member countries have grown by 14 percent since 2000 to 4.1 billion barrels at the end of 2006, when total stocks covered 122 days of net imports against an all-time low of 108 days in 2000.
Additional reporting by Randy Fabi in London; editing by William Hardy