The 100 million barrels of oil reserves previously promised by the G7 are starting to enter the market. This influx of oil and diesel is supplemented by additional volumes announced by other European nations, including Portugal, aiming to increase market fluidity and stability.
This operation has the endorsement of the International Energy Agency (IEA) and is part of a deliberation taken in March by its 32 members, including G7 countries, to release a total of 400 million barrels from their strategic reserves to combat market shortages.
The supply shortage was triggered at the end of February by attacks carried out by the United States and Israel against Iran. In retaliation, Iran imposed a blockade on the Strait of Hormuz, a route through which, before the conflict, one-fifth of the oil and liquefied natural gas consumed worldwide by Gulf producers passed.
The group of the seven most industrialized countries, currently led by France, announced in early October the intention to release 100 million barrels onto the market. This decision came under pressure from US President Donald Trump, who had warned about the possibility of prohibiting US diesel exports if fuel supply was not increased.
In response, eleven European Union (EU) countries joined the initiative, declaring that they would release 42.6 million barrels of oil from their strategic reserves, half of which would be diesel, in an attempt to help stabilize the market.
Among the countries that joined this action are Germany, France, and Italy, which are also part of the G7. The other members of this group of eleven EU countries are Greece, Denmark, Belgium, Luxembourg, Portugal, Latvia, Sweden, and the Netherlands.
French President Emmanuel Macron, whose government faces serious challenges due to recent social protests partly motivated by the rising cost of living resulting from high oil prices, has sought to present the G7 resolution as his own initiative, aligned with the measures he promotes to protect the purchasing power of French citizens.
France announced that it will make 10 million barrels of its strategic reserves available over a three-month period. Furthermore, it established a monitoring and control system to ensure that this measure is reflected in the prices charged at gas stations, predicting a drop in fuel prices between 12 and 18 cents per liter.
The French oil company TotalEnergies, which has been subject to political criticism due to the high profits obtained from the escalation of oil and gas prices, began applying this price reduction the day before, at 705 of its stations in France. The price of diesel at these locations was set at 2.15 euros per liter, maintaining TotalEnergies' commitment to ensuring a ceiling of 2.25 euros across its entire French network.
It should be noted that IEA members have not yet placed the entirety of the 400 million barrels initially announced in March onto the market. The organization's rules require members to maintain strategic reserves equivalent to at least 90 days of net oil imports so that they can react to severe supply disruptions.