SunSirs: Analysis of Market Impact from IEA’s Release of Crude Oil and Diesel Reserves

On Thursday, October 15, the International Energy Agency (IEA) announced that its Governing Board had confirmed the release of approximately 330 million barrels of crude oil to date. The Board agreed to take all necessary measures to complete the release of the remaining ~100 million barrels in a timely manner and pledged to release 20 million barrels of diesel “as soon as possible.”

The IEA Governing Board’s confirmation of the release of 330 million barrels of crude oil, combined with the decision to proceed with releasing the remaining ~100 million barrels, significantly boosts crude oil supply. This exerts substantial bearish pressure on both spot and futures prices for crude oil.

The IEA’s pledge to release 20 million barrels of diesel as soon as possible increases the circulating supply in the diesel market, exerting a moderately bearish influence on diesel spot prices.

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