Netherlands begins selling strategic oil reserves, but not kerosene

The Dutch government will start selling the first portion of its strategic oil and fuel reserves in the coming two to three weeks to help ease elevated fuel prices, even as oil prices have begun declining. No kerosene will be sold, officials said, because that market faces the greatest strain.

Pieter ten Bruggencate, a spokesman for the Ministry of Economic Affairs and Climate Policy, told RTL Z that the initial sale covers the first of roughly three parts of the government’s stockpile. The move follows agreements with the International Energy Agency (IEA). In March, the IEA called on its 32 member countries to release a combined 400 million barrels of oil. Under a fixed allocation formula, the Netherlands is contributing about 5.4 million barrels.

Roughly half of the Dutch share—about 2.7 million barrels—is coming from private companies such as Shell and Schiphol. The remaining half will come from government-held stocks managed by COVA, the agency responsible for maintaining reserves on behalf of the state.

Sales will be conducted gradually to maximize the effect on prices. Ten Bruggencate noted that many countries, including the United States, have already drawn heavily on their reserves, so “it’s the Netherlands’ turn.”

The Netherlands maintains a strategic kerosene stockpile but will not tap it. “That market is under the most pressure,” Ten Bruggencate told RTL Z. Shortages of jet fuel appeared in some locations because of the conflict, though the Netherlands itself had not faced immediate shortages.

Lucia van Geuns, an energy expert at the Hague Centre for Strategic Studies, said the composition of the released volumes will influence the price impact. Dutch reserves consist mainly of crude oil, with smaller amounts of refined products such as gasoline and diesel.

“There seems to be enough crude oil on the European market,” Van Geuns told RTL Z. Refined products, particularly diesel and kerosene, are a different matter. Europe’s limited refining capacity has left many countries dependent on imports, so releasing finished fuels from reserves could reportedly have a greater effect on prices than crude alone.