As Libyan unrest enters a new chapter, with the International Criminal Court issuing an arrest warrant for Colonel Muammar Gaddafi, prompting  a rapid public response from his legal team, instability of a different kind erupted at the end of last week with the IEA’s shock decision to release 60 million barrels of oil onto the market.

Oil prices dropped like a stone in response, as commodity traders across the globe dumped oil, with the price falling US$8 in the first day, only to regain some of that loss in the days after as markets quivered and sought to re-price the ongoing risk posed by the Libyan situation.

Incidentally, the decision also caused late-night bedlam in Pipeline Magazine’s  Dubai HQ, prompting a last minute reshuffling of news stories in the final stages of a late Thursday print deadline. News stories were swapped, Tweets were sent and analysts emailed for responses – all in the space of minutes. New media at its finest…or something like that.

The first to respond to our questions was Francis Osborne, principal analyst, Wood Mackenzie, who gave Pipeline an exclusive interview. Two points central to his response were i) the motivation for the announcement – more “psychological” rather than based on fundamentals, to paraphrase Osborne; ii) the interesting timing of the announcement, hot on the heels of Opec’s failure less than two weeks earlier to reach consensus on quota increases.

Woodmac was also just one of many analysts to surreptitiously suggest this could be a power-play on the part of IEA, "In the end, if at the same time, the IEA puts some of the more hawkish OPEC members' noses out of joint, I don't think they will be too upset," Osborne told Pipeline.

The move is a clear demonstration of the IEA’s ability to quickly and effectively manipulate the market (and there’s nothing wrong with that – it is part of its raison d’etre after all).

Adding a further dimension to this the timing of the move, is the fact that 2011 marks the fiftieth anniversary of Opec’s formation, a year in which its relevance in the modern marketplace is again being questioned. Without covering this issue here in any great detail – others have done so previously and better than we can in this forum - reasons include:

• Growing instability among its fourteen members

• 2011 as the year in which Iran’s oil minister, Masoud Mir-Kazemi, begins his tenure as OPEC President – the first time in 36 years he has held the position, and at a time when US and EU sanctions against the nation continue to be ramped up

• As another analyst, Greg Priddy, has told several reputable publications, a particular OPEC member nation’s past disagreements with OPEC have highlighted the power of such countries (who shall remain nameless) to act as unilateral decision-makers

• Last but not least, it has been suggested the global push toward alternative energy renders an organisation comprised solely of hydrocarbon-producing nations irrelevant.

Pipeline watches with interest the ongoing developments that continue to unfold in response to the IEA’s unprecedented decision – including the most recent condemnation of the IEA’s move from both Iran and Saudi Arabia – both OPEC member nations.

For now, it’s over to you our readers: what are your thoughts on the IEA situation and the latest responses from Iran and Saudi Arabia?