The International Energy Agency’s governing board is expected to decide on October 14-15 how much diesel and oil countries will release from emergency stocks and where the fuel will come from. National contributions remain unresolved after the G7 announced a 100 million-barrel release.
The decision will set details for a coordinated move involving strategic reserves, but the G7 hasn’t said how much of the total will be crude oil, diesel or other products, or which countries will participate. Italy, a G7 member, will take part, one source said.
Who decides the release details?
The Paris-based IEA advises industrialised countries and manages their strategic oil reserves. Its governing board is due to meet next week as market participants and some EU officials try to establish how much fuel Europe and the United States intend to make available. Two people close to the matter said the board would work through the release details at its October 14-15 meeting.
The IEA didn’t immediately respond to a request for comment on what the board was expected to decide. The White House also didn’t immediately respond to a request to clarify the planned release. The G7’s public announcement didn’t specify national shares or the locations from which the oil and fuel would be drawn.
The Group of Seven agreed on Friday to release 100 million barrels of diesel and crude oil from emergency reserves and pledged to refrain from energy export restrictions. The agreement followed pressure from US President Donald Trump. The G7 includes the United States, the United Kingdom, Japan and Canada, as well as France, Germany and Italy among the EU nations.
Shortages and prices
Diesel prices have surged. The fuel serves trucking, agriculture and industry, making it a global political and economic concern. Wars in Iran and Ukraine have curtailed exports and damaged refineries, helping drive prices higher.
The release aims to address shortages and record-high prices, but the amount of diesel within the 100 million barrels remains unknown. So does the breakdown between Europe and the United States. On Tuesday, market participants and some EU government officials were still trying to determine the finer points of Friday’s announcement.
Russell Hardy, chief executive of Vitol, also described the uncertainty. Speaking at a conference in London on Tuesday, Hardy said the commodities trading house was still trying to understand the details. “It wasn't a fully transparent announcement about exactly what was being released where,” he said.
Hardy said tenders from different bodies over the next two weeks would show how much oil was being released and in which locations. Those tender details will clarify the supply arrangements the G7 announcement left open.
EU coordination and earlier release
The EU’s oil coordination group will meet on Wednesday, a European Commission spokesperson said on Tuesday. Officials and market participants are seeking clearer information about the planned release and the countries’ contributions.
In March, the Iran war prompted the biggest emergency stock release ever: 400 million barrels coordinated by the IEA. When G7 leaders announced the new release last Friday, they said they would take into account commitments already fulfilled regarding that previous move.
The forthcoming IEA board meeting will address the specific quantities and sources of the new release. Until the board and participating bodies provide those details, the public announcement offers no country-by-country breakdown of what will enter the market.