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Oil prices starting to fall after reserve release decision, says Birol
Oil prices have started to fall after a decision to release 100mn barrels of oil and fuel reserves, International Energy Agency executive director Fatih Birol said on Friday.
Group of Seven countries agreed on Friday on the release of 100mn barrels of diesel and crude oil from emergency reserves in a move cheered by US President Donald Trump as he seeks help to cool off surging fuel prices linked to the Iran war.
The conflict sparked the biggest emergency stocks release in history in March coordinated by the International Energy Agency.
"We took a step today on diesel. We held a meeting with world leaders and announced that we would start releasing 100mn barrels of oil again," Birol said at a press meeting titled "Financing the Transformation: Turkey on the Road to COP31", hosted by Turkey's Banks Association Chairman Alpaslan Cakar.
"(Oil) Prices are starting to fall," Birol said. "I hope this will be a beneficial step both for the world and for Turkey."
Birol said that world leaders tasked the IEA with coordinating oil supply.
There has been a drop in oil prices of around $5 after the IEA's announcement of releasing oil and diesel from its reserves into the market in coming days, Birol said.
"We will finalise distribution once we have consulted with member states, we have enough reserves and can release more if necessary," he added.
Oil prices fell more than $3 and European gasoil futures dropped over 4% on Friday after reports of talks in Europe on additional diesel and crude stock releases, easing concerns over tight global energy supplies.
"The whole energy complex trades lower, led by gasoil and ULSD, as EU countries discuss releasing fuel and crude stockpiles to ease acute market tightness and help avert a potential US diesel export ban," Ole Hansen, head of commodity strategy at Saxo Bank, said.
European Union countries on Friday discussed a French proposal to release additional diesel stockpiles in response to US pressure on European nations to unleash more supplies, a source familiar with details of the discussion told Reuters on Friday.
In a call on Friday, EU countries' governments discussed a French proposal for European countries to release 50 million barrels of diesel, and for International Energy Agency members to release 50 million barrels of crude oil, the source said.
"This highlights that the main stress in the energy market is no longer crude availability, with Middle East flows recovering, but rather refined product supply, constrained by reduced refinery capacity and output across the Middle East and Russia," Hansen said.
Hamad Hussain, senior climate and commodities economist at Capital Economics said another release of oil stocks "could be enough to help tip the overall market back into a slight surplus if the recent pick-up in flows from the Middle East is sustained".
"The gradual recovery in oil flows through the Middle East Gulf (including pipeline bypass) has picked up pace of late," Barclays said in a note.
However, the bank said physical market fundamentals remained strong, with inventories continuing to be drawn, and prompt cargoes commanding steep premiums over forward prices.
The bank raised its fourth-quarter Brent forecast by $20 a barrel to $115 and lifted its 2026 forecast to $100 a barrel.
Elsewhere, Ukraine struck oil facilities in Russia's Samara and Volgograd regions over the past 24 hours, President Volodymyr Zelenskiy said on social media on Friday.