European countries have agreed to release additional diesel stocks as governments move to ease pressure on fuel markets following a sharp rise in prices linked to disruptions from the Iran war.
The Group of Seven said on Friday that it would coordinate the release of 100 million barrels of diesel and crude oil through the International Energy Agency. A substantial portion of the diesel is expected to be released within 20 days, with the wider programme running for four months.
The decision followed discussions over a French proposal for European countries to release 50 million barrels of diesel, while IEA members would release another 50 million barrels of crude oil. The proposed diesel release represents about 17% of the European Union’s emergency diesel and gasoil stocks and roughly 3% of annual consumption.
The move also comes amid pressure from the United States, which has pushed European countries to release more fuel from emergency reserves as diesel prices rise. Washington has also considered restricting US diesel exports in an effort to lower domestic fuel costs.
The latest action could ease tightness in refined fuel markets, although governments must balance immediate price pressures against the need to maintain emergency supplies in case disruptions continue.
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