IEA Ready to Release More Oil Reserves

The International Energy Agency (IEA) stands ready to release additional strategic oil reserves, prioritising diesel fuel to counter severe global market tightness.

IEA Executive Director Fatih Birol confirmed Wednesday that member states retain ample emergency stockpiles and will inject more supply into the market if conditions demand it.

The push follows last week’s agreement by G7 nations and the IEA to immediately release 100 million barrels of crude and diesel.

Global supply chains face extreme strain from the ongoing U.S.-Iran war.

While crude tanker traffic through the Strait of Hormuz has partially recovered, significant infrastructure damage to major refineries across the Middle East and Russia has choked refined product output, driving acute diesel shortages.

To mitigate supply shocks, member nations are prioritising diesel drawdowns.

IEA member countries hold approximately 1.1 billion barrels in emergency reserves, which include over 200 million barrels of diesel.

The IEA has already deployed 325 million barrels of its pledged 400-million-barrel allocation.

Individual nations are acting swiftly to shield consumers.

French Prime Minister Sébastien Lecornu announced Wednesday that France will release 10 million barrels of diesel directly to domestic distributors at cost price, expecting the move to lower pump prices by 12 to 18 cents per litre.

However, industry leaders warn against overestimating global safety cushions.

Saudi Aramco Chief Executive Amin Nasser cautioned that actual commercial stockpiles remain “scarily thin.”

Nasser highlighted that operational requirements lock up the vast majority of official reserve figures, leaving less than 10 per cent of total reported holdings available for immediate market intervention.