G7 Nations to Release 100 Million Barrels of Emergency Oil and Diesel Reserves

Group of Seven (G7) nations have agreed to release up to 100 million barrels of their emergency diesel and crude oil reserves, following a threat by former U.S. President Donald Trump to cut off American diesel supplies and a surge in global fuel prices.

The coordinated drawdown was announced after crisis talks held on Friday, according to reports from The Guardian and the BBC. French President Emmanuel Macron, who convened a video call among G7 leaders, confirmed the agreement, The Guardian reported.

Details of the Release and G7 Commitments

The planned release will comprise 50 million barrels of diesel and 50 million barrels of crude oil, The Guardian stated. A G7 statement, quoted by The Guardian, specified that the 100 million barrels (MB) will be released through the International Energy Agency (IEA) over a period of four months, beginning immediately. A substantial portion of the diesel release will be front-loaded within the first 20 days by G7 members and partners.

Ministers are expected to convene within the IEA framework in the coming days to discuss the potential for further diesel releases, The Guardian added. The G7, which includes Britain, Canada, France, Germany, Italy, Japan, and the United States, aims to stabilize immediate energy supplies, protect households and businesses from price shocks, and enhance the long-term resilience of global energy systems, according to the G7 statement.

The G7 also affirmed its commitment to refrain from imposing export restrictions on energy and petroleum products among member countries. Furthermore, the group called on all producers to avoid implementing bans that could escalate market tensions, The Guardian reported.

French President Macron outlined additional proposals, including making production more flexible to maximize refinery capacity and taking no measures to restrict the exchange of energy and petroleum products between partner countries, according to The Guardian.

Context of Surging Prices and Supply Concerns

The decision by G7 nations comes amidst considerable pressure on European countries from the White House to tap into their emergency supplies to avoid a potential U.S. diesel export ban, The Guardian reported. Former U.S. President Trump had indicated he was considering such a ban due to a surge in sales to overseas buyers, which had pushed U.S. diesel prices to record highs and negatively impacted the U.S. economy ahead of the November midterm elections, according to The Guardian.

Europe, which produces approximately 70% of the diesel it consumes, relies on imports to cover the remaining shortfall, The Guardian noted. Global fuel supplies have been strained by disruptions to fossil fuel exports from the Middle East, leading to limited output, and attacks on Russian refineries by Ukraine, which have caused Russia's fuel output to fall to 20-year lows, The Guardian reported.

In early August, the United States exported a record 1.9 million barrels of diesel per week to overseas buyers. This contributed to U.S. distillate stockpiles dropping to their lowest seasonal levels since 1996, and U.S. diesel pump prices surpassed $5.85 per gallon (£1.18 per litre) in early September, The Guardian stated.

The average price of diesel at pumps in the UK reached a record £2 per litre on Friday. The cost of filling an average family car in the UK now stands at £110, nearly £32 more than before the Iran war, according to the RAC motoring group, as reported by The Guardian. This price increase affects UK lorries, vans, and farming vehicles, leading to higher costs across the economy.

Brent crude oil was trading at just over $100 (£76) a barrel on Friday, a rise from approximately $72 before the Iran war began. Following the news of the emergency stockpile release, prices briefly fell to $98 but rebounded to over $102 a barrel by the end of the day, The Guardian reported.

In March, the IEA had previously ordered the largest release of government oil reserves in its history, releasing 400 million barrels of emergency crude to help stabilize prices after US-Israeli attacks on Iran. This represented one-third of the group's total government stockpiles, The Guardian noted.

Implications and Future Steps

The coordinated release is designed to prevent further price surges and to avert a ban on U.S. diesel exports, the BBC reported. French President Macron stated that the G7 aims to "work in a coordinated manner to help bring down the prices of petroleum products, particularly diesel," according to The Guardian.

Mr. Trump, in a post on his Truth Social platform, said that Europe had "agreed to release a massive amount of their heavily stocked Diesel Oil" and that the process would commence "immediately," The Guardian reported.

European Commission President Ursula von der Leyen welcomed the G7 decision, emphasizing that citizens "need and deserve affordable energy." She expressed support for an IEA-coordinated release while also noting the importance of "staying the course on the clean transition," The Guardian stated.

However, Walt Chancellor of Macquarie Group, speaking to CNBC, suggested that Europe's reliance on its own emergency reserves would not resolve the fundamental global energy issue. He indicated that the solution lies in "more oil through the strait of Hormuz and out of the Middle East," according to The Guardian.

Looking ahead, the G7 statement requests the IEA to monitor the immediate and full implementation of commitments made in March 2026, as well as the impact of these new measures on energy security and market stability. The IEA is expected to deliver a follow-up report within 20 days. The G7 also committed to coordinating maintenance schedules across its refineries and temporarily increasing utilization rates where feasible, while encouraging engagement with other countries to boost global production of refined products, particularly diesel, The Guardian reported.