Under pressure to draw on their hydrocarbon reserves as energy prices soar, the leaders of the Group of Seven (G7) agreed, following an emergency videoconference on Friday 2 October, to a “coordinated release onto the market, through the International Energy Agency (IEA), of 100 million barrels, beginning immediately and spread over 4 months”.
G7 members and their partners will also carry out “a substantial release of diesel, concentrated in the first 20 days”, according to a statement (https://aeur.eu/f/nqf ).
The decision is intended to address “unprecedented volatility in oil markets”. On Friday 2 October, oil and petroleum product prices fell significantly on international markets following the G7 announcement (see EUROPE 13951/2).
The measure also comes amid strong pressure from the United States. On 23 September, US plans for a possible 90-day ban on diesel exports were reported in the press. The measure was intended, in particular, to bring down global oil prices ahead of the US midterm elections. Washington denied the reports at the time, while US Energy Secretary Chris Wright publicly stated that he did not support such a decision (see EUROPE 13948/8).
On Thursday, however, US officials said Europe should make faster use of commitments already made within the IEA framework. US President Donald Trump said he “might” ask Europeans to use their reserves. On the same day, Chris Wright said on Fox News that “Europe [could] also help improve the situation” on global markets, adding that it was time for a coordinated release of diesel stocks ahead of winter.
EU rejects US pressure. An emergency meeting of five European countries (France, Germany, the United Kingdom, Ireland and Italy) was convened on Thursday evening, according to Politico, to respond “with one voice” to the US request and ensure that any decision was taken at the level of the International Energy Agency (IEA).
On Friday, the EU rejected any restrictions on exports on the United States side. “A ban would be in no one’s interest. It would undermine our confidence in the United States as a reliable partner”, warned Anna-Kaisa Itkonen, a European Commission spokesperson.
She also rejected the suggestion that the decision had been taken in response to US threats. The European Commission noted that a similar measure had already been taken in March (see EUROPE 13826/1), at the height of the crisis in the Strait of Hormuz. “Our priority is to ensure security of supply for our Member States”. Regarding the decision to release stocks, “we are participating in this process as members of the IEA, and it is the European Commission’s role to coordinate the position of our Member States”, the spokesperson added.
The EU Energy Union working group, chaired by the Commission, also met on Friday morning, with the International Energy Agency in attendance. The Irish Presidency of the Council of the EU “will continue to work closely with Member States and the Commission to monitor the global energy situation closely”, a diplomat said after the meeting.
For their part, the G7 leaders said they would maintain “sanctions against Russia while working with the IEA and our international partners to prevent further repercussions for fuel, gas and other commodity markets”.
Energy prices rose sharply in the euro area during September, pushing inflation up to 3.8%, its highest level in 3 years. (Original version in French by Juliette Verdes and Nadège Delépine)