Birol says oil fell $5 after IEA reserve release announcement
The International Energy Agency chief ties the drop to news that oil and diesel will be released from reserves in the coming days and weeks.
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Fatih Birol, head of the International Energy Agency, says oil prices fell at least $5 after the agency announced it will release oil and diesel from reserves in the coming days and weeks. He said the IEA will decide on distribution once it consults member states, and that it holds enough reserves to release more if needed.
The announcement follows a G7 plan unveiled today calling for the release of 100 million barrels of diesel and crude, including what the plan calls a substantial release of diesel reserves within the first 20 days, the Irish Times reports. The plan came together under pressure from Trump and did not specify how the 100 million barrels would be split between crude and diesel, according to the Irish Times.
Birol had resisted a fresh release for months. In August he told Reuters the IEA was not discussing a second release, noting 80% of reserves remained after a 400 million barrel draw in March. As recently as late September, in Dublin, he said another release was not the agency's top priority, pointing out that a third of the March release had yet to reach markets. France had separately called for a 50 million barrel release split evenly between diesel and crude. The Irish Times also reports that some European countries have not yet met their obligations from the March commitment to release 73 million barrels of refined fuels as part of that 400 million barrel draw.
The shift from waiting to an actual announced release marks a turn from the wait-and-see posture Birol held just days ago. The $5 price drop he describes is his own characterization of the market reaction, not an independently confirmed figure, and the size and timing of the barrels to be released remain unsettled until the IEA consults member states. The bigger question is whether the release addresses Europe's structural dependence on US diesel flows or simply cushions prices until the IEA's coordination meeting on October 15.