The International Energy Agency (IEA) is expected to work out the details of a planned 100 million-barrel (mmbbl) release of crude oil and petroleum products from emergency reserves at a meeting next week, as markets seek clarity on how much diesel Europe and the United States will make available to ease tight supplies and record-high prices, Reuters reported, citing sources familiar with the matter.
The IEA’s governing board is expected to discuss implementation of the release at its October 14-15 meeting, two sources close to the matter told Reuters.
The Group of Seven (G7) agreed on October 2 to coordinate the release through the IEA over four months, including a substantial frontloaded release of diesel within the first 20 days by G7 members and partners.
The G7, an informal forum of heads of state and government, did not specify how the 100 million barrels would be allocated among crude oil, diesel and other petroleum products, or provide a country-by-country breakdown of the volumes.
Italy will participate in the release, one of the sources told Reuters.
The European Union’s oil coordination group is also due to meet on Wednesday to discuss the market situation, a European Commission spokesperson said.
The planned release comes as diesel markets face tighter supplies and higher prices following disruptions to global energy flows.
At the G7 meeting on October 2, Fatih Birol, Executive Director of IEA said the impact of the Strait of Hormuz crisis remained acute, particularly in diesel markets.
He noted that around 325 million barrels of the IEA collective action announced on 11 March have so far been released, representing over 80% of the 400 million barrels originally pledged in the action. This has played a significant role in plugging the supply gap and reassuring markets in such unprecedented times.
While crude oil exports from the Middle East have recovered significantly, he said, refined-product flows remain severely constrained, with Ukrainian attacks on Russian refineries exacerbating the situation for diesel. This is resulting in tighter markets and higher prices, creating significant economic risks.
The G7 has also called for coordination of refinery maintenance schedules to avoid simultaneous shutdowns and encouraged countries with significant refining capacity to increase refined-product output where feasible.
The group pledged to refrain from imposing energy export restrictions among G7 countries and called on other producers to avoid measures that could further tighten markets.
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