IEA agrees to extra 100 million barrel oil release after US push

The International Energy Agency has agreed to the 100 million barrels of crude Washington pressed for, and plans to release 20 million barrels of diesel on top of that.

The International Energy Agency has agreed to release an extra 100 million barrels of crude, the figure the United States had pushed its members to add. The group also plans to release 20 million barrels of diesel as soon as possible, on top of that amount.

Washington had told IEA member nations it was unhappy with the emergency release then under discussion at the group's October 14-15 board meeting. That plan focused on diesel. The IEA has said the market faces a supply deficit of 1.73 million barrels a day tied to disruption linked to Iran, a gap a diesel-only release would not close.

The disruption behind that gap has been building. A third supertanker was struck in the Strait of Hormuz in two days, according to Iran's Revolutionary Guard. Separately, Iran's parliament speaker, Mohammad Bagher Ghalibaf, has said a deal with the United States would not prevent another attack on Iran, and CNN has reported that Washington is weighing use of the GBU-57 bunker-buster bomb against Iran.

Washington's push for a far larger release signalled that it saw the diesel-only plan as insufficient against the risk of further disruption through the Strait of Hormuz. The agreed package puts 100 million barrels of crude and 20 million barrels of diesel on the table. How much spare capacity markets can count on will depend on whether disruption in the Strait continues.