Europe to release 42 million barrels of oil, France says

Europe will put 42 million barrels of oil reserves on the market over the next three months to bring down fuel prices, and half of that volume will be diesel. French Economy Minister Roland Lescure announced the plan on Thursday, Oct. 29, before a meeting of European Union energy ministers in Luxembourg, Bloomberg reported. The release is part of Europe's share of a coordinated emergency drawdown. Governments are trying to deal with record fuel prices and diesel shortages linked to the Iran war ahead of winter.bloomberg.com

France's diesel arrives first

Lescure said France's previously announced release of 10 million barrels of diesel would reach the market in the coming days, and that prices should start to respond as soon as next week, according to The National. The fuel will be sold at cost, which he said would cut prices by 12 to 18 cents a liter. An Economy Ministry adviser said this is the first time France has used its strategic reserves to lower prices. French government spokesperson Maud Bregeon has said the French release covers about 20% of the country's diesel use over three months and that refilling the stocks would take about a year, The News reported.thenationalnews.com+1

Finishing the March pledge

The European volumes complete earlier commitments rather than adding new ones. The Group of Seven agreed on Oct. 2 to release 100 million barrels of oil and diesel from emergency reserves after pressure from President Donald Trump, Reuters reported. A document seen by Euronews showed that the G7 figure is meant to close out the unfinished part of the record 400-million-barrel drawdown that the International Energy Agency (IEA) launched in March.reuters.com+1

On Oct. 15, IEA members agreed to speed up the remaining releases, including more than 20 million barrels of diesel "as soon as possible," according to Reuters. IEA data cited by Argus showed that 331 million barrels had been released by the end of September and 96 million were still outstanding, 46 million of them from Europe. The IEA has said its members still hold about 1.1 billion barrels of public emergency stocks, including more than 200 million barrels of diesel, according to an agency statement.reuters.com+2

Uneven delivery across Europe

Countries are moving at different speeds. Italy says it has fully delivered its 10-million-barrel pledge and is open to doing more if other European countries meet their commitments, The News reported. Spain plans to release 4.4 million barrels in October, which is its second release toward an 11.5-million-barrel pledge, according to The Globe and Mail.theglobeandmail.com+1

The diesel market is still tight. Only 8 million barrels of emergency stocks were released in September, according to S&P Global. Lescure said diesel is "at the heart of all our challenges" and added that Europe will keep the option of drawing further on its reserves, as Futu News reported.spglobal.com+1