The International Energy Agency’s governing board is expected to decide on October 14-15 how a new release of diesel and oil stocks will work. The amount available from Europe and the United States remains unclear. Diesel underpins trucking, agriculture and industry, and its price surge has become a global political and economic concern.
Unclear volumes and sources
The Group of Seven agreed on Friday to release 100 million barrels of diesel and crude oil from emergency reserves. Its announcement didn’t specify how much would be crude, diesel or other products, or which countries would take part. Italy, a G7 member, would participate, one source said.
Two people close to the matter said the IEA would meet next week to work out the details, as market participants and some EU officials try to determine how much fuel countries will make available and where it will come from. The IEA’s governing board meeting is scheduled for October 14-15.
The announcement came as shortages and record-high prices prompted questions about planned volumes on both sides of the Atlantic. Oil market participants and some EU government officials were still trying on Tuesday to establish the finer points of the G7 agreement.
Wars in Iran and Ukraine have curtailed exports and damaged refineries, helping drive prices higher. The fuel affected by the price surge goes to trucking, agriculture and industry.
Emergency stocks and coordination
The Paris-based IEA advises industrialised countries and manages their strategic oil reserves. It didn’t immediately respond to a request for comment on what its board was expected to decide. The White House also didn’t immediately respond to a request to clarify the release details.
The EU’s oil coordination group will meet on Wednesday, a European Commission spokesperson said on Tuesday. Officials and market participants want more detail on the planned release. The meeting follows the G7 announcement.
The Iran war prompted the IEA to coordinate an emergency stock release of 400 million barrels in March. When G7 leaders announced the new release on Friday, they said they would take into account commitments already fulfilled regarding that earlier move.
The G7 includes the United States, the United Kingdom, Japan and Canada, as well as the EU nations France, Germany and Italy. The agreement also included a pledge to refrain from energy export restrictions.
Traders await tenders
Russell Hardy, chief executive of Vitol, said at a conference in London on Tuesday that the commodities trading house was still trying to understand the release details. “It wasn't a fully transparent announcement about exactly what was being released where,” he said.
Hardy said tenders from different bodies would emerge over the next two weeks and show how much oil would be released and where. “And so over the next two weeks, we'll see tenders coming out from different bodies, and those tenders will tell us exactly how much oil and in which location it's going to come out,” he said.
The available information ahead of the IEA board meeting leaves the release’s composition, participating countries and locations unsettled. The G7 has announced the total volume, but not the breakdown of fuels or country contributions.