Group of Seven nations agreed on Friday, Oct. 2, to release up to 100 million barrels of emergency diesel and crude oil stocks over four months. The decision came after Washington pushed Europe to draw down its strategic reserves and threatened to ban U.S. diesel exports.
French President Emmanuel Macron chaired the leaders’ video call and said the International Energy Agency would coordinate the release. A G7 statement promised a “substantial diesel release within the first 20 days,” NBC News reported.
The agreement aims to ease record diesel prices in the United States and Europe. Those prices have been driven up by the US-Iran war and by a Russian export ban imposed after Ukrainian strikes on its fuel facilities. Fuel costs have also become a political problem for President Donald Trump’s Republicans ahead of the Nov. 3 midterm elections.
From a French proposal to a G7 deal
Before the call, Macron spoke separately overnight with Trump and Canadian Prime Minister Mark Carney. He urged G7 countries to act “in a coordinated way, without export restrictions,” according to the Élysée. On Friday morning, EU governments discussed a French plan: European countries would release 50 million barrels of diesel and IEA members would release 50 million barrels of crude, two sources told Reuters.
According to one source, the US had asked large European countries to release 100 million barrels of diesel within 20 days. EU countries discussed making any deal conditional on a US commitment not to impose a unilateral diesel export ban.
Brussels had already pushed back hard. “We fully reject any ban on diesel. A ban would not be beneficial to anyone. It would undermine our trust in the United States as a reliable partner,” European Commission spokeswoman Anna-Kaisa Itkonen said. On Thursday, Treasury Secretary Scott Bessent wrote that “American farmers, truckers, and businesses should not be left carrying the burden of a global diesel shortage”.
Europe was not united. People familiar with the talks told Politico that Berlin was reluctant to release any barrels. “Germany and others don’t want to be used,” one said.
Markets retreat
Oil prices fell as the talks went on. According to Agence France-Presse, West Texas Intermediate dropped as much as 5% and Brent slipped back below $100 a barrel after several days above that level. Diesel had also fallen from recent highs on Friday as reports of a possible European release spread.
Analysts warned that the underlying shortage remains. Rabobank said the real constraint is “an exceptionally tight global distillate market following widespread refiner disruption”.
The new release adds to the 400 million barrels that IEA members agreed to unlock in March, the largest such release on record. IEA head Fatih Birol said this week that about a third of that volume had yet to reach the market. He added that 80% of overall IEA stocks were “still in our pocket.”
G7 agrees to release up to 100M barrels of diesel, crude
