Constantini, V. and Gracceva, F. (2004) Oil Security, Short- and Long-Term Policies. INDES Working Paper No. 7, 1 March 2004. [Working Paper]
After the dramatic supply interruption during the 1973 oil crisis, the International Energy Agency (IEA) was established in 1974, with the primary mission of creating and regulating a mechanism to mitigate negative effects of future oil disruptions, and the long run goal of decreasing dependency on OPEC, adopting diversification strategies and conservation of supply (Peters, 2003). The mechanism of emergency response was adopted with the International Energy Programme (IEP), requiring IEA countries to implement a system of crisis management. Basically, the IEP commitments included reducing oil demand and sharing available oil in the event of major physical oil supply disruptions. IEA members are also required to hold oil stocks equivalent to at least 90 days of net imports in the previous year. The emergency program was supposed to get into effects in case of international disruption with a 7% loss of world supply.
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