00:00Now, Kevin Morrison is an analyst at the Institute for Energy, Economics and Financial Analysis.
00:05Joining us now, thank you so much for your time.
00:07$100 million of diesel and crude, as I understand.
00:11How is it going to affect prices, do you think?
00:15Well, if we just stand back and put this into context,
00:19the release of around 50 million barrels of diesel,
00:24that really equates to about eight days of demand for Europe.
00:29That's the whole of Europe. That's including the UK.
00:32So it does provide some temporary relief.
00:35But just further back, the OECD only really accounts for about a third of the world's diesel demand.
00:44Two-thirds of the world's diesel demand is outside of the OECD.
00:48That's the likes of China, India, Brazil, etc.
00:52So it will have some impacts.
00:54But you just mentioned the prices earlier.
00:57You know, we've still got Brent at over $100 a barrel.
01:00And so the diesel price is still well above what it has been for most of the summer.
01:05But quick point of clarity.
01:07It was all focused by Trump on Europe.
01:10But of course, the G7 nations also include the United States, Canada and Japan.
01:15So are they also on board completely with releasing stockpiles?
01:19Or were they never the problem in the first place?
01:23Well, the statement that's been released, it's pretty vague on the split between who's releasing what and when.
01:34But I think just the reading between the lines, I mean, it seems like most of this would be bought
01:38by the European members of the G7.
01:42And so, you know, and separately, the U.S. said this week it was releasing another 40 million barrels from
01:49its SPR, which is now sort of at its lowest level in more than 40 years.
01:55So it's really used up a lot of its stockpile buffer.
02:00And so, you know, this seems more of a political fix than sort of some sort of structural adjustment to
02:08the market.
02:08You touched on this a little earlier, but what are the risks of releasing a stockpile now, bearing in mind
02:15that two global conflicts that are nowhere near resolution and winter is still on its way?
02:22Exactly. I mean, pretty much answer your question.
02:25I mean, it really does reduce their options in the future.
02:30You know, just as I said, the U.S. stockpiles, the near 40-year lows, you know, do they really,
02:36if these conflicts, which, as you said, have no sign of ending, if they continue and markets are continuously squeezed,
02:45you know, we see crude flows through the stroke of the moose dry up again, you know, we could be
02:52in an even worse situation.
02:53There's no real sort of telling where we're going to go next.
02:57Thank you so much for speaking to us.
02:59Kevin Morrison, Energy Finance Analyst at the Institute for Energy Economics and Financial Analysis.
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