The European Union (EU) has announced that it will only release additional oil and diesel reserves after receiving confirmation from the International Energy Agency (IEA) that the release will not affect energy security. This was stated by three diplomats familiar with the matter.
Group of Seven agreement to release 100 million barrels
The Group of Seven, which includes Italy, Japan, Germany, the United Kingdom, France, Canada, and the United States, reached an agreement on Friday to release 100 million barrels of oil and diesel. Previously, the U.S. government had threatened to ban diesel exports if Europe did not utilize its oil reserves.
Read more: France and Germany announced that diesel reserves do not need a new release to Trump
Emphasis on using previous reserves
The International Energy Agency appeared to confirm on Wednesday that the planned release would come from previous reserves and would not include additional supply. In other words, this action does not mean new releases but rather fulfilling previous commitments.
During a meeting on Wednesday afternoon, EU representatives also stated that they would halt future releases until a clearer assessment of market conditions and energy supply risks is provided by the International Energy Agency. One diplomat noted that European countries need to know "how far we can go".
In the face of high diesel prices, some EU countries have warned that releasing reserves now could leave them vulnerable in the event of an energy supply crisis. Among the IEA members, there are inefficient reserves that could help meet the promised 100 million barrels.
Of the 400 million barrels promised in March, 325 million barrels have been released, and some countries have released "more than they initially promised." According to the International Energy Agency, about 100 million barrels remain that member countries can release under this agreement.
The International Energy Agency stated that this new commitment "completes" the March agreement. The 32 member countries of the agency include wealthy nations from Europe, North America, and East Asia.
Reports indicate that France and Germany, which have some of the largest oil reserves in Europe, have shown that they will not release more reserves beyond the promised amounts or will only release minimal amounts.
It is still unclear what proportion of the current release will go to non-EU countries, especially since Japan has rejected any additional releases.
Further details regarding oil releases by the Group of Seven will be discussed at the upcoming meeting of the International Energy Agency's governing board next week.
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