G7 to release up to 100 million barrels of oil and diesel

The G7 has agreed to immediately release up to 100 million barrels of oil and diesel from reserves over four months to ease supply concerns and price pressure.

Members plan a substantial diesel release within the first 20 days. The International Energy Agency will coordinate the operation, but the participating partner countries and the pace of their releases have not yet been specified.

The decision follows US President Donald Trump’s threat to ban American diesel exports unless European countries put more of their own stocks on the market. Trump later said such a ban had “never really been on the table”.

G7 measures for fuel supplies

The G7 comprises the US, UK, Canada, Japan, Germany, Italy and France, with the European Union represented at its meetings. Its joint statement also committed members to coordinate refinery maintenance schedules to avoid simultaneous shutdowns and encouraged countries with spare capacity to increase diesel refining.

French President Emmanuel Macron said the coordinated action was intended to reduce petroleum-product prices, particularly diesel. UK Foreign Secretary Ed Miliband said the measures would stabilise energy supplies and protect households and businesses from price shocks.

Tight global fuel supply

The 100 million barrels will include a mix of crude oil and diesel. Brent crude briefly fell below $100 a barrel before recovering to about $102 on Friday evening; it had been trading at roughly $73 before the US and Israel invaded Iran.

Matt Smith, director of commodities research at Kpler, said prices had risen again after renewed strikes between Saudi Arabia and the Houthis in Yemen. International supplies have also been constrained by the Middle East conflict and reduced flows from Russia and China.

Relief for import-dependent markets

Avoiding a US diesel-export ban will ease pressure on countries that rely on imports, including the UK. More than half of the UK’s diesel is imported, with 31% of those imports coming from the US; pump prices exceeded £2 per litre for the first time on Friday.

Diesel is heavily used in haulage and agriculture, so higher fuel costs feed into the prices of essentials, including food. The G7 also said it would maintain sanctions against Russia over its war in Ukraine.