G7 countries agreed on Friday to release 100 million barrels of diesel, gasoline and crude over four months through the IEA. Analysts told later reports the price effect may be temporary while diesel supply stays short.
G7 countries agreed on Friday to release 100 million barrels of diesel, gasoline and crude from emergency reserves over four months, coordinated through the International Energy Agency. The Washington Post and Nikkei, citing the joint statement and Reuters, said the move followed US pressure to cool fuel prices linked to the Iran war.
The statement said the release would start immediately, with a substantial amount of diesel front-loaded within 20 days by G7 members and partners. It did not split the total between diesel and crude or name each contributor. Countries also said they would refrain from energy-product export bans.
Xinhua reported on October 4 that IEA executive director Fatih Birol said about 325 million barrels had already been released under a collective action announced in March, more than 80 percent of a 400 million barrel pledge. The G7 also agreed to coordinate refinery maintenance and to encourage higher diesel output where possible.
Wood Mackenzie analyst Alan Gelder estimated a major diesel release could lower wholesale prices by 20 to 30 dollars a barrel, Xinhua reported, but said the effect may be temporary while diesel supply remains below demand.
Europe has increased imports of US diesel this year because Gulf supplies were disrupted, Nikkei reported. The release is a stock draw, not new production.
People Sentiments Mixed
- The G7 statement said members would implement the release through the IEA.
- Gelder warned the price effect may not last, Xinhua reported.