G7 countries have agreed to release 100 million barrels of crude oil and diesel from emergency reserves over four months, in an effort to bring down soaring energy prices following pressure from US President Donald Trump.
The coordinated release, which will begin immediately through the International Energy Agency (IEA), will include a “substantial diesel release within the first 20 days”. The G7 said it would consider further diesel releases if necessary.
The agreement was reached after a video conference chaired by French President Emmanuel Macron. The group includes the United States, UK, Canada, Japan, Germany, Italy and France, with the European Union also represented.
Oil prices rose by more than $4 a barrel on Thursday, while the average US diesel price reached a record $6.50 a gallon last Friday, up from $5.61 a month earlier, according to the American Automobile Association.
G7 oil release will target pressure on diesel supplies
In a joint statement, G7 leaders said: “Taking into account commitments that have already been fulfilled, we will implement our commitments with a coordinated release through the IEA of 100 million barrels.”
It was not immediately clear how much oil or diesel each member would release. The IEA’s executive director, Fatih Birol, said earlier in the week that members had already released about two-thirds of a separate 400-million-barrel agreement.
The G7 also said it would coordinate maintenance schedules at refineries to avoid simultaneous shutdowns and temporarily increase production rates where possible. Members were urged not to impose export restrictions on energy products between them.
Brent crude, the international benchmark, briefly fell below $100 a barrel after the announcement before rising to about $102 later in the day.
Macron said the move would reduce prices for petroleum products, particularly diesel. Naeem Aslam, chief investment officer at Zaye Capital Markets, described the release as “very much needed”, but said its effect would depend on which countries released stocks, what they released and where export restrictions were lifted.
Neil Atkinson, the former head of the IEA’s Oil Industry and Markets Division, said the measure was welcome but did not address the underlying shortage in global supply. He said diesel supplies had been hit by the loss of Middle Eastern exports to Europe, the halt in Russian diesel exports following attacks on refineries, and China no longer exporting diesel.
Demand was also expected to remain high during the agricultural harvesting season. Diesel is used by trucks, freight trains, ships, tractors, harvesters, construction machinery, mining equipment and backup generators, meaning higher prices can feed through into the cost of food, building materials and deliveries.
Trump drops threat of US diesel export ban
The release follows pressure from the Trump administration, which had urged European countries to use their emergency diesel reserves and threatened to restrict US diesel exports if they did not do so.
Trump said on Friday that the United States would not impose an export ban, insisting that the plan had never really been under consideration. “Europe has a lot of diesel, and they’re going to be making a major world contribution, and so are we. And we’re not going to be doing the export ban. We’re going to be doing what we’re supposed to do,” he said.
After the G7 announcement, Trump wrote on his Truth Social platform: “Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil. The process will begin immediately.”
The White House was also reported to be preparing an executive order aimed at record-high US diesel prices, which could be unveiled as early as next week.
Frederic Schneider, a non-resident senior fellow at the Middle East Council on Global Affairs, said diesel prices were particularly damaging because the fuel was used by producers rather than only by consumers. He said farmers were being hit by rising diesel and fertiliser costs at the same time.
