IEA members support faster release of reserve oil stocks
Members of the International Energy Agency (IEA) expressed support on Wednesday for accelerating the release of roughly 100 million barrels of reserve oil stocks previously agreed to in March. About 325 million barrels of oil have been released under the March agreement to ease oil markets after the onset of the Iran war led to a surge in energy prices. The IEA also said members had agreed to…
The International Energy Agency (IEA) members have endorsed the accelerated release of approximately 100 million barrels of reserve oil stocks, as outlined in an agreement reached in March. This decision came following a surge in energy prices triggered by the Iran war. Since then, a total of 325 million barrels of oil have been released to mitigate the impact on the oil markets.
In addition, the IEA has emphasized the prioritization of diesel stock release. Despite holding around 1.1 billion barrels of emergency oil stocks, including over 200 million barrels of diesel, IEA members remain prepared to release more reserves to the market if deemed necessary. Executive director Fatih Birol affirmed the IEA's readiness to provide further support.
The IEA's actions have been welcomed by G7 leaders, who recently outlined their stance on global energy and security. The G7 countries also agreed to release 100 million barrels of diesel and other reserves via the IEA, responding to pressure from the US administration led by President Donald Trump. The conflict in Ukraine and the Middle East has caused a global rise in fuel prices, exacerbating the situation for Trump as he heads into the November midterm elections.
In an effort to alleviate pressure on fuel costs, Trump signed an executive order waiving restrictions on red-dyed diesel, which could provide relief for lorry drivers experiencing higher fuel expenses. Diesel prices have surged to over $6 per gallon in recent weeks, compared to the $3.60 per gallon average this time last year. The White House revealed that the federal diesel tax stands at 24.4 cents per gallon, amounting to roughly $60 for a 250-gallon fuel purchase.
Europe too is grappling with higher diesel prices, reaching a record €2.24 per litre, up from €1.59 prior to the Iran war's onset on February 28. Currently, the US is engaged in a 172-million-barrel drawdown from its strategic petroleum reserve, which is projected to decline to its lowest level since 1982 upon completion.
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