G7 strategic fuel release unlikely to ease diesel prices in Estonia
The G7 plans to release 100 million barrels of oil and diesel from strategic reserves, but Estonia is not part of this round and experts say prices are unlikely to fall.
G7 nations — Canada, France, Germany, Italy, Japan, the U.K. and the U.S. — are preparing to release 100 million barrels of oil and diesel fuel from strategic reserves, acting under U.S. pressure to ease strained global energy supplies. Although Estonia has taken part in past international reserve releases, it has not been included in this latest round.
The International Energy Agency says its member countries, Estonia among them, have released a combined 325 million barrels of oil and petroleum products so far, part of a March commitment to release 400 million barrels total — leaving 75 million still outstanding. Alan Vaht, a board member at Estonian fuel retailer Terminal, cautioned that the new 100 million barrels should not be read as an addition on top of the 400 million already pledged. It remains unclear whether an extra 25 million barrels will be released by the G7 or the IEA to round the new release up to 100 million.
Estonia released a proportional 10 percent of its own reserves back in March but has not been asked to contribute this time. According to the Estonian Stockpiling Agency, the country currently holds about 83 days' worth of fuel reserves — against a 90-day standard, which it has met for diesel specifically, said Jaanus Uiga, deputy secretary general at the Ministry of Climate. He noted Estonia released less diesel in spring after identifying a small surplus, releasing more gasoline instead.
No price relief expected
Vaht said global fuel inventories have grown extremely thin, sitting roughly 20 percent below the five-year European average, while damage to refineries has pushed up the cost of processing crude oil. Alexela board member Tarmo Kärsna said recent price spikes have eased somewhat, but prices remain near early-September highs. He warned against expecting a major price drop, pointing to rising winter demand and the approaching heating season as additional pressures, adding that prices are likely to stay at current levels until the conflict in the Strait of Hormuz is resolved.
