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Chapter 1: What is the main topic discussed in this episode?
The Pat Kenny Show. With Timber Living Log Cabins. Saturday and Sunday from 10am. On Newstalk. Conversation that counts.
Government. It's reported releasing 10 days worth of oil from the National Reserve. We're joined now by data journalist with the Irish Times, Rachel Lavin, to analyse Ireland's oil reserve and energy security. You're very welcome to the programme, Rachel. You can hear me all right? And everybody at home can. That's good to hear.
Chapter 2: Why is Ireland releasing 10 days worth of oil from its national reserve?
OK, we are reading, I suppose, that the supply of oil into the country has been fairly steady, has been fairly stable. So what is the strategy here? Why release this oil?
So yes, I analysed ships coming into the country and it looks so far like the pattern of ships docking at Irish ports has remained relatively consistent. But obviously the price of oil is surging and that's the reason that the International Energy Agency, which is in charge of Global Oil Supply, which Ireland is a member of, has directed its members to release about 10% of their oil.
So we have 90 days on reserve and we're now releasing 10. We've already released five back into the European market. Again, it's an effort to stabilise prices and we're going to release another five in the coming weeks.
Is it going to be easy enough for them to replace that oil that they're releasing?
I guess that's a good question. I don't know if the plan is to replace it just yet with the price of oil that it is. The plan is to stabilise prices. So replacing that oil over time, I think, would be more of a long term goal than something they're going to try and immediately replenish.
But the government, I suppose, has certain obligations in terms of the amount of reserve that it keeps in the country at any one time.
Yes, it's the IAA that dictates the reserve and dictate the release. So the same body that tells us to keep this on reserve is telling us to release it.
So what will this ultimately, do you think, mean for consumers here? I mean, will we see any big change in the prices?
I mean, this is the IEA's strategy that by every country and their membership, and it's a large global organization releasing 10%, that it will have some impact on stabilizing prices. But I mean, we're really in, it's very hard to predict what's going to happen with oil prices until the Strait of Hormuz reopens. So the Strait of Hormuz is responsible for 20% of the global oil flow.
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Chapter 3: What does the current oil supply situation look like in Ireland?
So you can obviously see the government initiatives taking some effect. But it's very much a wait and see. This market is incredibly volatile. And obviously the situation in the Middle East is incredibly volatile as well.
As you say, this is part of a bigger international overall release by the IEA, 400 million barrels in total. Is there a precedence? For this at all, is there evidence, I suppose, from previous releases like this that it has done much to stabilise prices?
I couldn't say for sure. This feels relatively unprecedented for the last few decades. So, you know, it is an international oil supply crisis. I guess we're kind of in new territory here. The only parallel might be the beginning of the Ukraine war. But that completely reconfigured how we consume and get our supply of oil.
So, again, we're in new territory here and it's all to play for in the coming weeks.
Ireland, like lots of other EU states, as I said, it is meant to hold around 90 days of these oil reserves. Where exactly does it hold them within the country?
So according to the Bloomberg terminal, we have 26 oil storage terminals around the country. But we also store a lot of our reserve abroad. So we store some of it in Spain, Sweden, Denmark and the Netherlands. Amsterdam is a major port destination. Most of the National Reserve is on Whitty Island, which is an island off the coast of Bantry. I'm sure people in Cork are familiar with it.
It used to have gun batteries from the 1800s. It was used as an airbase by the US during World War I. And it has been an oil terminal since the 1960s. There was actually a famous... explosion off the coast of the island in which 51 people died in 1979. So there's these huge oil terminals. I think there's at least 14 on this island and that is where 30% of our national oil reserve is stored.
The rest is around the country. You've got Whitegate Refinery down in Cork and Cork Beg Island is a major docking station for international tankers coming into the country. That oil gets refined and then also gets transported to other parts of the country. You've got Dublin Port, you've got Foynes, You've got some in New Ross. But yes, you've got these huge tankers.
Each terminal stores about 65,000 to 85,000 tonnes. That's three to four days. And with our 90 days, it would take about 27 terminals. But of course, there's more stored at the refinery at Whitegate. So the release of the 10 days, that's three terminals worth of oil that we're releasing.
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Chapter 4: How does the International Energy Agency influence Ireland's oil reserve strategy?
We've got a 90-day reserve. We're in line with the IEA. We're relatively, like our consumption, which is another metric, our consumption has not changed. Actually, since the war began, our consumption of oil slightly increased, particularly for diesel.
Does that suggest that consumers here are of confidence in the supply?
Yeah, it suggests a high degree of confidence. There was a stable pattern of consumption, a slight increase since the war.
for motor diesel kerosene dropped off but that's a seasonal change so that's heating oil um i'm sure in september when people start to turn on their heating again on oil prices oil becomes more demand we might see you know a price challenge then again but uh for the moment the main metric nora looks at is consumption so as long as consumption is stable um They are relatively calm.
Other countries are struggling a lot more, particularly in Asia. So we're OK for the moment. This is an initiative to decrease prices. It all hinges now on what happens in the Middle East.
And if that conflict in the Middle East does stabilise, and we covered those negotiations on the programme yesterday in Mark Weiss with the Irish Times, the Israel correspondent said he was more optimistic than... than ever that we are actually now going to see a deal and get it over the line. How quickly could we expect a return to pre-crisis pricing and reserve levels?
Because we're being told, I think by lots of commentator that the impact perhaps hasn't fully been felt and is likely to linger for months and months.
Don't hold your breath. There's obviously many factors in these negotiations. There's also a lot of bluster and a lot of false promises. There has been a few false starts so far with the ceasefire. But even if there is a ceasefire, if we go... into Iran and look at their production capabilities. Has Karag Island been damaged?
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Chapter 5: What impact will the oil release have on consumers in Ireland?
Has their production been damaged? Can they restart the flow of oil that is coming from Iran but also through the Gulf as easily as before? There could be major damage to their facilities that lingers in terms of global supply.
And that damage that you talk about there doesn't sound like the type of damage that you can fix and make sure that everything is operational in a very short period of time. This is not something you turn around in a matter of weeks or months generally.
Particularly when it's being run by the regime. I mean... We will find out after a ceasefire when we follow the flow and the movement of ships through the strait. But there could be damage in Iran that has a long-term effect. I don't want to be too negative, though. I mean, there's certain hard deadlines, I guess, for this conflict. Israel has election in September.
The US has elections in November. Iran is running out of money. So Iran needs the oil to get going. The regime needs to get this oil flowing again. So hopefully that will lead to a ceasefire, but we'll have to wait and see what the long-term effects are.
So what you seem to be saying is, on paper, anyhow, Ireland's oil supply is pretty steady, it's pretty safe, and it's the case of we're better off than a lot?
Yeah. I looked at ships coming into the country ports with the ship tracking website. It's called Marine Traffic. They track every ship going around the globe. 93% of our oil tankers that came in in the last 19 days came from Europe. So it was about 200 ships came in with oil or oil chemicals. 65 came from Europe, 45 came from the Netherlands. 6% is coming from North America.
So that's America and Canada. And then one, the furthest the last ship came that had last docked elsewhere was from Tanzania. So most of our oil is coming through Europe or through the States. Like 93% is coming through Europe. So we are as stable as the rest of Europe, essentially.
All right, Rachel Lavin, data journalist with the Irish Times.
Thank you so much for coming into us this morning.
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