ع
The Group of Seven committed to a coordinated release of 100 million barrels of crude oil and diesel from emergency reserves, a decision that sent oil prices lower as markets anticipated increased supply. According to a joint statement issued after a video conference of G7 leaders chaired by French President Emmanuel Macron, the release will begin immediately and continue over four months with a substantial diesel component concentrated in the first 20 days. The International Energy Agency will oversee the effort, which accounts for commitments already partially fulfilled from an earlier pledge. European diesel futures fell sharply in response while crude benchmarks also posted notable declines.
The agreement follows mounting pressure from US President Donald Trump, who had floated the possibility of banning American diesel exports to alleviate high domestic prices ahead of November midterm elections. Trump stated on Truth Social that Europe had agreed to release a massive amount of their heavily stocked diesel oil with the process beginning immediately. Reports indicated the European Union considered a French proposal involving 50 million barrels of diesel from Europe and another 50 million barrels of crude from IEA members. The G7 statement further pledged that members would refrain from imposing energy export bans.
Global diesel prices had climbed to record levels with the average US price for a gallon reaching $6.50 last Friday according to the American Automobile Association, up from $5.61 a month earlier. The surge stems from supply disruptions tied to the conflict involving Iran that began earlier this year and has strained refinery output. In Europe prices hit a record high of €2.24 per litre compared with €1.59 before the war started, according to regional assessments. The fresh reserve release aims to address these strains and stabilize broader energy markets.
Oil prices moved lower immediately after the announcement with Brent crude declining 1.76 percent to $100.50 a barrel and West Texas Intermediate falling 2.18 percent to $90.85 a barrel. For the week Brent was down around 2.84 percent while West Texas Intermediate had dropped about 1.54 percent. The premium of diesel over crude narrowed to roughly $69 a barrel from higher levels the day before.
Macron said the work would prioritize diesel and that France would draw from its stocks to send a clear signal to markets. The French president added that the move would bring down the prices of petroleum products particularly diesel. Trump welcomed the development noting it would help ease costs for American drivers facing elevated fuel prices at the pump.
Analysts observed that the decision highlighted Europe’s vulnerability to any potential US restrictions on diesel exports. Phil Flynn, senior analyst at the Price Futures Group, told Reuters that Europe would suffer the most if such a ban were enacted. The underlying diesel shortage could continue until idled refineries resume full operations according to energy sector evaluations.
The G7 comprises the United States, United Kingdom, Canada, Japan, Germany, Italy and France with European Union representation. This release builds on the largest-ever draw of 400 million barrels coordinated by the International Energy Agency in March following the onset of the Iran conflict. A 50-million-barrel diesel release would represent approximately 17 percent of the European Union’s total emergency stocks according to Eurostat data.
