IEA members back prioritizing diesel from 1.1 billion barrel reserve stockpile
Member states hold more than 200 million barrels of diesel within the group's total reserves ahead of an October 14-15 board meeting
Published
International Energy Agency members hold around 1.1 billion barrels in reserve, including more than 200 million barrels of diesel, and have backed prioritizing the release of diesel stocks specifically.
The support marks a shift from France's standalone proposal, filed earlier for a 50 million barrel release of crude and diesel reserves, toward what now looks like broader agreement among IEA members. The board will set the terms of any G7 diesel and oil reserve release at its meeting on October 14 and 15.
Europe's dependence on imported diesel has built up over decades. Tax incentives pushed the region's vehicle fleet toward diesel far more than in the United States, leaving Europe structurally short of the fuel and long on gasoline, according to a Bruegel analyst quoted by Deutsche Welle. That gap has widened this year as wars in the Mideast Gulf and in Russia have strained supply lines, according to Energy Intelligence. Since March, after Mideast supplies through the Strait of Hormuz were effectively cut off, the United States has supplied more than half of Europe's diesel imports, and more than two-thirds of them in August and September, Energy Intelligence reported. Diesel imports into Europe fell to their lowest September total on record, worsened by an extended Russian diesel export ban and a Chinese fuel export suspension, according to a Vortexa report cited by Yahoo Finance and CNN.
The focus on the diesel portion of the reserve tracks with that reliance on imports, and a confirmed release targeting diesel specifically would add supply to diesel markets rather than crude broadly. Germany's own approval process is already under way, suggesting member states are positioning to implement a release rather than simply debate one. Whether crude itself comes under pressure depends on whether the release expands beyond diesel when the board meets.