International Energy Agency to release more than 20 million barrels of diesel as soon as possible
The Trump administration pushed Europe to release diesel stocks as prices in the U.S. surged to record highs in September.
Key points
- IEA members agreed to release more than 20 million barrels of diesel as soon as possible.
- The release equals less than one day of global diesel demand or about five days of U.S. consumption.
- Diesel futures fell more than 1% to $4.86 on Thursday.
International Energy Agency members have agreed to release more than 20 million barrels of diesel as soon as possible, the Paris-based group said in a statement Thursday. The decision comes as fuel prices surge globally.
The release is equivalent to less than one day of global diesel demand or slightly more than five days of U.S. consumption. The IEA did not specify a timeline for the release.
What officials said
President Donald Trump said earlier this month that Europe had agreed to deploy a massive amount of its heavily stocked diesel oil. The Group of Seven nations, led by France, said on Oct. 2 that they would deploy substantial diesel stocks over 20 days. If that is the IEA's timeline, members would supply about 1 million barrels each day for almost three weeks.
Andy Lipow, president of Lipow Oil Associates, said the release does not solve the basic problem, which he described as how to increase production at refineries damaged in the Middle East or Russia and operating at capacity in the USA.
not solve the basic problem which is how to increase production at refineries which are damaged in the Middle East or Russia, and operating at capacity in the USA
— Andy Lipow, president of Lipow Oil Associates
Prices and pressure
Diesel futures were trading more than 1% lower Thursday at $4.86. The retail price of diesel averaged $6.32 per gallon Thursday, more than 70% above the same period last year, according to AAA.
Trump faces political pressure over fuel prices ahead of the U.S. midterm elections on Nov. 3. He struck a diesel deal with Russia last week that analysts have said will do little to reduce prices. Prices have surged as Ukraine has pounded Russian refineries and Iran and its Houthi allies have attacked energy facilities around the Persian Gulf.
Earlier stockpile releases
IEA members agreed in March to deploy 400 million barrels of oil in response to the global supply disruption triggered by the Iran war. They have since agreed to release the remaining 100 million barrels pledged in March in a timely manner consistent with national circumstances, the group said Thursday.
The IEA's governing board said 330 million barrels have been released so far. Some members have deployed more than they originally pledged, so the total release will exceed the 400 million barrels agreed in March.
