G7 Agrees 100 Million Barrel Release as IEA Counts About 325 Million Released From March
G7 leaders agreed on 2 October to release 100 million barrels in a coordinated action through the International Energy Agency. The release starts immediately and runs over 4 months, with a substantial diesel release front-loaded into the first 20 days by G7 members and partners. On our calculation, that is a notional average of about 0.83 million barrels a day if spread evenly over 120 days, though the actual profile is front-loaded. At the leaders’ virtual meeting, the agency’s Executive Director Fatih Birol said about 325 million barrels of the collective action announced on 11 March had been released.
Where the March action stands
On our calculation, 325 million barrels is 81 percent of the 400 million barrel pledge, which leaves about 75 million barrels still to come from March. The leaders’ statement says the new release takes “into account commitments that have already been fulfilled”, and asks the agency to monitor the immediate and full implementation of the March commitments. It does not specify how the new 100 million barrels relate to the roughly 75 million barrels still unreleased from the March action, whether the volumes overlap fully, partly or not at all.
Emergency oil stock releases, million barrels
| Item | Volume | Basis |
|---|---|---|
| IEA collective action pledged, 11 March | 400 | Agency figure |
| Released so far | About 325 | Agency figure |
| Still to be released from March | About 75 | Our calculation |
| G7 coordinated release, from 2 October | 100 | G7 statement |
| Notional daily average over 120 days, million barrels a day | About 0.83 | Our calculation |
The daily figure assumes an even spread over 4 months of 120 days; the statement front-loads the diesel release into the first 20 days.
Diesel is the pressure point
Birol said crude oil exports from the Middle East have recovered significantly, but refined product flows remain severely constrained. He said Ukrainian attacks on Russian refineries were making the diesel situation worse, tightening markets and raising prices. The leaders’ package goes after refining as well as stocks. G7 countries will coordinate refinery maintenance schedules to avoid simultaneous shutdowns and raise utilisation temporarily where feasible. They will also encourage engagement with countries that have significant refining capacity to boost output of refined products, particularly diesel. They reaffirmed their commitment to refrain from export restrictions on energy and energy products between G7 countries, and called on all producers to refrain from bans that could worsen market tensions. They also called for the immediate and full restoration of navigational rights in the Strait of Hormuz.
Why it matters: On our reading, the pressure has moved from crude to refined fuel. With Middle East crude exports recovering, by the agency’s account, the 100 million barrels and the refinery measures target the part of the chain where supply is still short. The front-loaded diesel tranche goes straight at the product whose prices carry the economic risk Birol described.
Outlook: The agency is due to deliver a follow-up report within 20 days, with recommendations that include replenishing stocks. On our calculation, the 20 day window for the front-loaded diesel release runs to about 22 October. The leaders will meet within the agency’s framework in the coming days to discuss further diesel releases if needed, so the size of the action may not be final.
Sources: French G7 Presidency, International Energy Agency, The Edge.
