The IEA minimum stockholding obligation is based on the average daily net imports of the previous calendar year. This covers all petroleum, including both primary products 1(such as crude oil and natural gas liquids [NGLs]) and refined products, with the exception of naphtha and volumes of oil used for international marine bunkers. Refined products are converted to crude oil equivalent, the amount of crude necessary to produce a given amount of product.
A country’s 90 day emergency reserve commitment is defined as: daily net imports x 90.
Daily net imports are defined as:
- net imports (adjusted for stock changes) 2 of primary products, from which is deducted a naphtha yield of 4% 3;
- plus net imports (adjusted for stock changes) of all refined oil products (excluding naphtha and international marine bunkers, including additives, such as biofuels, which have already been blended into the fuel) converted to crude oil equivalent by multiplying by a factor of 1.065;
- divided by the number of days in the year.
A country’s emergency reserves, which are counted towards meeting its 90 day commitment, are defined as its total oil stocks4 (net any bilateral stockholding arrangements), adjusted in the following way:
- a naphtha yield of 4% is deducted from stocks of primary products;
- refined oil product stocks (with the exception of stocks of petrochemical naphtha and of international marine bunkers) could be counted as emergency reserves in either of the following ways:
- all existing product stocks, converted to crude oil equivalent by the general IEA factor of 1.065;
- only stocks of the three main product groups (gasolines and naphtha for gasoline production, middle distillates and heavy fuel oil) which are converted to crude oil equivalent by an average factor of 1.2 5.
- a 10% deduction is made in order to account for unavailable stocks (such as tank bottoms).
Days of net import cover is the result of: emergency reserves ÷ daily net imports.
- “Primary products” consists of crude oil, NGLs, refinery feedstocks, additive/oxygenates (including biofuels) and other hydrocarbons (such as synthetic crude oil from oil sands).
- Net imports are adjusted for stock change such that increases of stocks in a given year are not counted as part of the daily net imports amount, while stock reductions in a given year are added to the daily net import figure. Thus, oil imported for the purpose of building emergency reserves does not add to the emergency reserve commitment.
- For most IEA countries, a 4% deduction is made to reflect a naphtha yield, based on a weighted average across the IEA. Countries for which the national yield is above 7% may opt to use their actual national naphtha yield factors or volume to adjust their net imports.
- Total oil stocks include stocks of additives such as biofuels which are destined for blending with fuels or for fuel use.
- This factor is used to convert an aggregate of the three main products into an amount of crude oil required in average refinery operations to produce those products. The use of this factor assumes that products, other than the three main products and naphtha, are stocked in proportion to their refinery yield.