Oil and refineries choke world fuel
The governing board of the International Energy Agency (IEA) is due to meet on Thursday (15 October), amid growing pressure on global diesel supplies.
Ahead of the meeting, IEA executive director Fatih Birol has written to member governments, warning that tightening diesel markets require immediate attention and are best managed through continued international co-operation.
The IEA comprises 32 member countries, 14 association countries, including China, South Africa, India and Nigeria, and six countries seeking membership, including Brazil. Established in 1974, the agency co-ordinates collective responses to major disruptions in oil supplies.
Collective action
Birol said the emergency release of oil from national strategic reserves launched on 11 March 2026 remained under way, providing a framework for further short-term measures. He urged IEA members that had not yet released their full pledged volumes under the March initiative to accelerate the remaining releases, prioritising diesel.
According to the agency, some members have already released more oil than they initially pledged.
Following the IEA’s assessment of diesel markets and a recent statement by G7 leaders, Birol also encouraged members that had completed their pledged releases to consider whether additional diesel supplies were needed. Those choosing to release more oil should specify the volumes, timing and additional nature of the releases, he said.
The IEA governing board meeting on 15 October will provide an opportunity to review progress.
“As we did in March, I believe we can once again demonstrate the IEA’s capacity to act together in support of energy security and economic stability,” Birol said.
G7 considers further measures
The Group of Seven (G7), comprising the United States, Canada, France, Germany, Italy, Japan and the United Kingdom, alongside the European Union, has warned that unprecedented volatility in oil markets and surging prices threaten economic stability and citizens’ wellbeing.
The group has committed to co-ordinating refinery maintenance schedules to prevent simultaneous shutdowns and temporarily increase utilisation rates where feasible.
G7 members also encouraged engagement with countries that have significant refining capacity to boost global production of refined petroleum products, particularly diesel, amid continuing market pressures.
In a statement, the group said it would begin a co-ordinated release of 100 million barrels through the IEA over four months. The plan includes a substantial front-loaded release of diesel within the first 20 days by G7 members and partners.
At Thursday’s meeting, the G7 intends to discuss the possibility of further diesel releases if necessary.
SA exposed to supply disruptions
South African news outlet IOL recently reported that global observed oil stocks fell by a further 95 million barrels in August. This brought the total decline since the start of the conflict in the Middle East to 507 million barrels, equivalent to an average of 2.8 million barrels a day.
The international fuel crisis has raised concerns about South Africa’s ability to withstand disruptions to global oil supplies, particularly given its limited strategic crude oil reserves and growing reliance on imported refined products.
Gwede Mantashe, South Africa’s minister of mineral and petroleum resources, recently told parliament that the country held strategic fuel stocks of 6.9 million barrels, which he said were sufficient for about 30 days of crude oil requirements.
He acknowledged the country’s vulnerability as domestic refining capacity declines. “Our refining capacity with Sasol guarantees a cover of 40% of what we need as a country. Sixty percent is imported,” he said.
Targets 60 days of fuel stocks
IOL previously reported that South Africa was taking steps to strengthen its energy security and reduce its dependence on imported fuel.
Mantashe has outlined plans to build strategic fuel stocks equivalent to 60 days of net fuel imports, accelerate oil and gas exploration and advance regulatory reforms in the petroleum sector.
The proposed stockholding target is intended to ensure that the country has sufficient crude oil and refined fuel reserves to cushion it against global supply disruptions and market shocks.
“In response, we have developed the draft Strategic Petroleum Stocks Policy, which is now ready for cabinet consideration prior to publication for public comment,” Mantashe said.
The policy proposes a mixed stockholding model under which the South African National Petroleum Company (SANPC) would be responsible for maintaining strategic reserves equivalent to 60 days of net imports of both crude oil and refined petroleum products.
Namibia consolidates fuel imports
Meanwhile, Namibia is consolidating its bulk fuel imports amid uncertainty in international markets.
In September, the minister of industries, mines and energy, Modestus Amutse, announced that the TotalEnergies bidding group had been awarded the exclusive mandate to import the country’s bulk petrol and diesel from November 2026 to January 2027, with its trading company, TOTSA, serving as the supplier.
Over the three-month period, Namibia is expected to import approximately 246.9 million litres of diesel and 98.4 million litres of petrol.
Amutse said the successful bid marked the first time fuel would be supplied at a price below the basic fuel price. The bid offered a discount of 61 cents a litre on diesel and 71 cents a litre on petrol.
“Taking the two fuels together in the volumes we import, that is an average discount of 63.85 cents on every litre,” he said.
“Over the three months, it amounts to a saving of approximately N$220.5 million compared with the current arrangement.”
The minister said on 21 September that the arrangement “strengthens the ministry’s ability to keep pump prices stable for motorists and the economy”.
