Europe will release 42 million barrels of oil reserves into the market over the next three months as part of its commitment to ease prices, France’s economy minister Roland Lescure said on Thursday.
Half of that release will be diesel, Mr Lescure said ahead of a meeting of EU energy ministers in Luxembourg. Group of Seven nations agreed last month to release up to 100 million barrels, marking a completion of an IEA-coordinated 400-million-barrel release in March.
Mr Lescure said a French release of 10 million barrels of diesel announced last month would hit the market in the coming days and the impact on prices would be felt as soon as next week. The reserves would be supplied to the market at cost price, lowering prices by 12 cents to 18 cents a litre he said.
Options open
This is "short-term relief", Mr Lescure said. "Hopefully the crisis will solve itself slowly but surely, and if not, we'll keep our options open, of course."
He said France was working on a "multilateral agreement" to lower the price of insurance for ships going through the Strait of Hormuz, which has been under a blockade by Iran since the US and Israel launched strikes on it earlier this year.
"I'm concerned by the crisis. This crisis has been going on for too long. We need to find diplomatic ways to sort it out," Mr Lescure said. "In the meantime, we have to get ready for the winter, and we are."
High energy prices have fuelled public protests in France and across Europe.
This is the first time France has released strategic reserves in order to reduce prices, an advisor at the Economy Ministry said.
Fuel distributors have been encouraged to start advertising reduced prices as early as November 1. Small distributors in remote areas will benefit from zero-interest loans.
Last week, Mr Lescure was in Abu Dhabi as part of a tour of five Gulf countries led by French President Emmanuel Macron in a bid to secure energy shipments.
Mr Macron came away from his tour with a deal with Saudi Arabia, Kuwait, the UAE and Bahrain for 300,000 tonnes of diesel a month.
However its impact on the price at the pump remains unclear due to fluctuating prices on international markets.
A pledge by Qatar to sell LNG to France also remains dependent on Qatar's ability to have LNG ships go through the Strait of Hormuz - its only export route.
Agencies contributed to this report
