IEA could consider more oil reserve releases as Europe faces tough winter

The International Energy Agency (IEA) has hinted that it may consider releasing additional strategic oil reserves to alleviate supply shortages faced by Europe during the challenging winter season. At a meeting of EU energy ministers in Dublin, IEA Executive Director Fatih Birol stated that the agency has already released 400 million barrels of crude oil since March, with one-third of that yet to make its way to the market. Birol emphasized that 80% of the released stocks remain available.

If the need arises and member countries agree, the IEA is prepared to act to address current and future market challenges. However, Birol noted that currently, addressing the issue is not the top priority for the IEA.

The concern arises as EU Energy Commissioner Dan Jørgensen highlighted the extra costs Europe has incurred since the start of the war in Iran. Jørgensen disclosed that European Union countries have spent over €100 billion more on energy imports, yet have not received "one extra molecule of gas or oil" due to disruptions in shipments through the Strait of Hormuz.

This waterway, which previously carried about a fifth of the world's traded oil, has become a critical chokepoint for global oil and diesel supplies, with Europe relying heavily on imports.

Jørgensen called for accelerated investment in electricity and power infrastructure to reduce the bloc's dependency on imported fossil fuels, especially as Europe enters the harsh winter season. He pointed out that Europe is one of the most exposed regions when it comes to diesel, as the continent imports a significant amount of the fuel.

The US has supplied around half of the EU's diesel imports in August, but concerns have arisen as Europe approaches winter with already tight diesel supplies. The US is considering export restrictions, a move that would likely exacerbate Europe's already strained diesel situation.