The International Energy Agency (IEA) has announced a plan to expedite the release of over 20 million barrels of diesel. This action aims to accelerate the release of emergency oil stocks, which total over 400 million barrels. Since the onset of the crisis in the Strait of Hormuz, approximately 330 million barrels of these reserves have been supplied to the market.
Current Status of Oil Reserves
Currently, members of the International Energy Agency have yet to supply about 100 million barrels of their commitments made in March to the market. Some countries have released more oil than their initial commitments, while others have still retained part of their reserves. However, the diesel segment of these releases has disappointed the market.
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Increase in Diesel Prices and Higher Demand
Diesel prices in Europe have risen following Thursday's announcement. Traders seem hopeful for an immediate further injection. Additionally, the United States has asked other member countries of the agency to supply more emergency cargoes to the market, as diesel prices are nearing record levels, which has become increasingly significant ahead of the midterm elections on November 3.
Spain will also release another 4.4 million barrels from its strategic reserves in October. So far, the country has supplied 3.7 million barrels of the 11.5 million barrels it promised in March to the market. Diesel remains a weak point in the global fuel system. Disruptions in refineries in the Middle East and reduced fuel production in Russia have decreased diesel exports, while crude oil exports from the Gulf are gradually improving.
Considering that governments have already supplied nearly 330 million barrels of emergency oil to the market and about 100 million barrels more are still planned, the release of over 20 million barrels of diesel is currently underway. However, market expectations clearly indicate a desire for larger quantities of this type of fuel.
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