IEA Members to Accelerate Release of Over 20 Million Barrels of Diesel Amid Record Prices
The International Energy Agency announced that member states, including Canada, will accelerate the release of more than 20 million barrels of diesel to ease fuel cost pressures following record wholesale prices and supply disruptions linked to the U.S.-Iran conflict.
Member states of the International Energy Agency (IEA), including Canada, have agreed to accelerate the collective release of over 20 million barrels of diesel into the global market as soon as possible. The move aims to ease pressure on global fuel costs after wholesale diesel prices hit record highs of around $220 a barrel in Europe and the United States in September.
The decision builds on an agreement reached in March, when IEA members pledged to release more than 400 million barrels of oil from emergency reserves to calm markets disrupted by the conflict between the United States and Iran in the Middle East. As of Thursday, over 330 million barrels of emergency reserve oil had been released since March, leaving approximately 100 million barrels targeted for accelerated distribution. Because some IEA members have released higher volumes than initially pledged, the total amount of stocks to be released now exceeds the original 400 million barrel target.
Canada agreed to release a total of 23.6 million barrels, representing the third highest volume among individual IEA members. The accelerated distribution will focus specifically on diesel, which has faced severe market strain. Global diesel exports were 700,000 barrels per day lower than a year earlier, contributing to volatility in oil prices and vulnerability in diesel and jet fuel markets due to limited flexibility elsewhere to increase output.
According to an IEA report for October, the war in the Middle East created the largest supply disruption in the history of the global oil market. Crude oil exports through the Strait of Hormuz are slowly recovering after more than half a year of conflict between the United States and Iran. The ongoing supply challenges carry broader economic consequences, indirectly increasing consumer costs across trucking, agriculture, construction, mining, rail, marine transport, and industrial activity.