ROME/LONDON: The International Energy Agency (IEA) is expected to determine the details of a planned diesel and crude oil release from emergency reserves next week as uncertainty grows over the volumes Europe and the United States intend to make available to ease fuel shortages and record-high prices.
The surge in diesel prices has emerged as a major global economic and political concern because the fuel is critical to trucking, agriculture and industrial activity. Conflicts involving Iran and Ukraine have disrupted exports and damaged refining capacity, contributing to the sharp increase in prices.
Under pressure from US President Donald Trump, the Group of Seven (G7) major economies agreed on Friday to release 100 million barrels of diesel and crude oil from emergency reserves and pledged not to impose energy export restrictions.
However, the G7 announcement did not specify how much crude, diesel or other petroleum products would be released, nor did it identify which countries would participate.
IEA Board to Discuss Release
The governing board of the Paris-based IEA, which advises industrialised economies and coordinates emergency oil-stock mechanisms, is expected to discuss and finalise the details at its October 14–15 meeting, according to two people familiar with the matter.
The IEA did not immediately comment on what decisions are expected at the meeting.
The G7 comprises the United States, United Kingdom, Japan and Canada, along with EU members France, Germany and Italy.
Italy to Participate
One source said Italy would participate in the planned release, while the European Union’s Oil Coordination Group is scheduled to meet on Wednesday, according to a European Commission spokesperson.
The White House did not immediately respond to requests for clarification regarding the volume and composition of the planned release.
The latest move follows the 400-million-barrel emergency stock release in March, coordinated by the IEA after the Iran conflict triggered severe disruption in global oil markets. It was the largest emergency release of strategic oil stocks on record.
G7 leaders said their latest decision would take into account commitments already fulfilled under the previous emergency stock release.
Market Seeks Clarity
Oil traders and European government officials were still attempting to determine the precise implications of Friday’s announcement on Tuesday.
Russell Hardy, chief executive of Vitol, said the commodities trading company was also seeking greater clarity on the plan.
He said the announcement had not fully specified how much oil would be released, where it would come from or which markets would receive it.
Market participants are now watching for tenders from individual countries and agencies, which are expected to provide greater clarity on the volume, type and location of oil stocks that will be released.
The uncertainty has added to volatility in global oil and refined-product markets as governments attempt to contain diesel shortages and high prices while maintaining adequate strategic reserves.
By Reuters
