G7 to release 100 million barrels of oil and diesel
Photo: REUTERS
The G7 agreed to release 100 million barrels of oil and diesel to ease skyrocketing price pressures across global energy markets.
The group, comprising the US, UK, Canada, Japan, Germany, Italy, and France, along with representation from the EU, confirmed that the move includes a “substantial release” of diesel in the coming days.
This action follows a threat from US President Donald Trump to ban US diesel exports - a step aimed at reducing fuel costs for US consumers before November’s midterm elections, though it threatened to push up prices elsewhere.
In a joint statement, G7 leaders announced that member nations agreed to “refrain from export restrictions on energy and energy products” among themselves. Trump had previously warned that he would block American diesel exports if European allies failed to release more of their own energy reserves onto the market.
Following the agreement, Trump posted on social media: “Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil. The process will begin immediately.” Speaking later at the White House, Trump asserted that an export ban on diesel was “never really on the table”.
Before the summit, Treasury Secretary Scott Bessent argued that US farmers, truckers, and businesses “should not be left carrying the burden” as fuel costs surge. Because the haulage industry and agricultural sector rely heavily on diesel, rising fuel prices directly drive up the cost of essential goods like food.
Following the meeting of G7 leaders, French President Emmanuel Macron confirmed that member states agreed to release reserves of “up to 100 million barrels” within four months under the coordination of the International Energy Agency (IEA).
Macron said the coordinated action would “bring down the prices of petroleum products, particularly diesel” while emphasizing that “President Trump, in particular, was very clear on this point” regarding the agreement against export bans.
Representing the UK at the meeting, Foreign Secretary Ed Miliband stated that these joint emergency measures would “stabilise energy supplies, build resilience in supply chains and shield households and businesses from price shocks.”
Official joint statements from G7 leaders detailed their operational roadmap, “We will implement our commitments with a co-ordinated release through the IEA of 100 million barrels to begin immediately over four months, including a frontloaded substantial diesel release within the first 20 days by G7 members and partners.”
Although leaders outlined the overarching timeline, officials have not yet clarified which partner nations will release stocks or how quickly the process will unfold.
The emergency stockpile release of 100 million barrels consists of a combination of crude oil and diesel fuel. Following the announcement, global benchmark Brent crude oil briefly dropped below $100 a barrel before rebounding to roughly $102 by Friday evening - up from about $73 prior to the invasion of Iran by the US and Israel.
Matt Smith, director of commodities research at Kpler, attributed the price rebound to renewed military strikes between Saudi Arabia and Houthi forces in Yemen. Smith noted, “Oil prices were selling off strongly due to the announcement of strategic stock releases in Europe, but they reversed course on rumours of Saudi Arabia planning an offensive into Yemen as it looks to re-establish a safe path via Bab-Al Mandeb.”
European nations actively pushed back against US threats to turn off American diesel exports amid the ongoing US-led war in the Middle East and reduced fuel supplies from China and Russia.
Beyond emergency stock releases, G7 leaders pledged to coordinate refinery maintenance schedules to prevent multiple facilities from shutting down simultaneously, while encouraging countries with available capacity to accelerate diesel refining.
Resolving the US export ban threat offers significant relief to import-dependent nations like the UK, where pump prices surpassed £2 a litre for the first time on Friday. The UK imports over half of its total diesel supply, with 31 percent originating directly from US refiners.
Data from the US Energy Information Administration (EIA) highlights the pivotal role of the US in global energy supply, showing that domestic refineries output between 4 and 5 million barrels of diesel per day.
While Americans consume around 3.6 million barrels daily, refiners export the remaining 1.2-1.5 million barrels per day, making the US a vital supplier to international markets. International diesel supplies remain heavily constrained by the conflict in the Middle East, which has restricted global flows of both crude oil and refined fuel.
Compounding global market pressures, Russia - another major energy producer - enforced its own diesel export ban following Ukrainian attacks on Russian refineries, further restricting global availability. Amid the war, G7 leaders stressed that they will maintain strict sanctions against Russia.
Energy experts noted that diesel presents unique challenges because it is harder to refine than petrol, and its essential role in haulage and agriculture makes reducing global demand extremely difficult.
Source: BBC (adapted)
