The decision by the G7 countries to release oil and diesel fuel from their emergency reserves may temporarily reduce prices, but it will not eliminate the shortage of refined fuels or the risks to supplies through the Strait of Hormuz. That is the assessment of energy and economic experts.

Samina Sultan of the German Economic Institute said releasing the reserves could soften the consequences for a limited period, but would not resolve the underlying problem. The impact on drivers will also depend on the amount of diesel placed on the market, she said. The G7 statement did not specify that amount.

Ole Hansen, head of commodity strategy at Saxo Bank, said the main pressure on the energy market was now less related to the availability of crude oil than to the limited supply of refined products. Refinery capacity and production have declined in the Middle East and Russia, restricting the supply of processed fuels.

The assessments came after September became Germany’s most expensive month on record for refuelling. Energy prices rose by 14.9 percent year on year, contributing to an acceleration of German inflation to 3.3 percent. In North Rhine-Westphalia, diesel was 48.7 percent more expensive than in September of the previous year.

In response to the high prices, Germany cut fuel duties for the second time this year. A three-month relief measure has been in force since October 1 and is expected to reduce petrol and diesel prices by 16.7 euro cents per litre.

Christian Laberer of the motoring club ADAC said prices were likely to fall gradually. He called for the tax reduction to be passed on to consumers in full and as quickly as possible. The relief may not be felt equally by all drivers, he warned, because the reduction might not reach consumers immediately or in full.

The G7 countries agreed to release up to 100 million barrels of crude oil and diesel from their emergency reserves over a period of four months. The measure will be coordinated through the International Energy Agency, with significant diesel volumes due to be made available during the first 20 days.

The G7 will also consider releasing additional diesel reserves. The countries further committed not to impose restrictions on trade in energy and oil products among themselves.

US President Donald Trump said he would not permit a ban on diesel exports from the United States. He had earlier called on European countries to release quantities from their diesel reserves, while Washington had been considering restricting US exports.

Record diesel prices increased pressure on the US administration. Analysts warned that an export ban could deepen the global shortage and lead to lower production at American refineries.

International Energy Agency Executive Director Fatih Birol said oil prices had already begun to decline. Before the measure was officially announced, Brent crude had returned below 100 dollars per barrel, while European gasoil futures used as a benchmark for diesel prices had fallen by more than 5 percent.

Sultan said a lasting normalisation of energy prices would require the restoration of free shipping through the Strait of Hormuz. Disruptions along the key maritime route have restricted crude oil exports and severed the connection between major refineries and the global market.

Risks to shipping remain high. A crude oil tanker was hit by an unidentified projectile in the Strait of Hormuz off the coast of Oman. The crew is safe, and there is no information about an oil spill.

Sultan warned that if a new escalation completely stopped traffic through the strait, the released reserves would be insufficient to offset the disruption to supplies.

Source: bta.bg/bg