IEA announces release of 325 million barrels of oil by G7 countries

The International Energy Agency (IEA) indicated on Saturday that almost a sixth of member states' strategic oil reserves had been sold since March, when the G7 decided to draw on these stocks. Some 325 million barrels of strategic reserves of oil and petroleum products have been released to date, out of the 400 million promised by the G7 in March, the International Energy Agency announced on Saturday.

The day before, the G7 had announced “a coordinated release, by the IEA, of 100 million barrels, which will begin immediately”, without specifying in its press release whether these 100 million barrels included the remaining 75 million provided for in the commitment made on March 11, or if they brought a total commitment to 500 million barrels. According to the IEA in a statement on Saturday, “around 325 million barrels of the IEA collective action announced on March 11 have been released so far, representing 80% of the 400 million barrels originally promised.”

On March 11, it specified that its member states held “emergency stocks” of “more than 1.2 billion barrels, with an additional 600 million barrels of stocks retained by the industry by government obligation”. Released stocks therefore represent 18% of this total. These stocks have been planned since 1974, the year following the oil shock triggered by the Yom Kippur War, with the aim of countering sudden tensions on supply.

Between March 11 and July 21, released stocks represented 290 million barrels. Only 35 million barrels were added between the end of July and the beginning of October. Two factors complicate the supply of hydrocarbons to the G7 countries. On the one hand, exports from Gulf countries are disrupted by the blocking of the Strait of Hormuz by Iran, attacked by the United States and Israel. On the other hand, energy infrastructure in Russia is a target for Ukraine, which hopes to destabilize the Russian army waging war on its territory.

While refineries elsewhere in the world are running at full capacity, fuel prices have risen sharply everywhere, including in the United States, a net exporter of both oil and petroleum products. Washington fueled tensions by explaining that the European Union, half of whose diesel comes from the United States, could do more to ease the pressure.

On Thursday, the American press claimed that Donald Trump's administration was considering banning these exports to Europe. The next day, Donald Trump explained that “it was never really on the table”, and welcomed the decisions of the G7. The commitment made is 100 million barrels “over a period of four months” (i.e. until the end of January), at an accelerated pace initially. The G7 indeed plans “a significant release in the first 20 days of diesel by G7 member states and partner countries”.

The calendar corresponds to the campaign for the mid-term legislative elections in the United States, scheduled for November 3. The political debate in this country continues to revolve around the rise in prices at the pump and inflation more generally, which has made public opinion overwhelmingly hostile to continued attacks against Iran.

“Please act like I’m on the ballot,” urged President Donald Trump. However, according to some projections, his party, the Republicans, could lose the majority in the House of Representatives or the Senate, or even both.