G7 Release of 100 Million Barrels Fails to Fix Tight Fuel Market, Analysts Warn

Crude oil prices and middle distillate cracks slumped after the G7 announced the release of 100 million barrels of oil stocks over four months, including a front-loaded diesel release within the first 20 days. West Texas Intermediate fell to about $90 per barrel as US gasoline and diesel prices declined. Analysts caution the move is a band-aid solution. Drawing down already-depleted inventories leaves fuel markets more vulnerable to future disruptions and offers only transitory relief unless flows resume normally through the Strait of Hormuz. China halted fuel exports beyond Hong Kong and Macau ahead of Golden Week, which began October 1. Russia extended its ban on diesel, marine fuel, and gasoil exports until October 31. US, European, and Asian refineries cannot offset lost Middle East and Russian supply. "Stock releases could provide temporary relief into the peak demand period, but restoring refinery output and trade flows remains essential," said Ole Hansen, Head of Commodity Strategy at Saxo Bank.