BRUSSELS: Group of Seven countries have agreed to release 100 million barrels of crude oil and diesel from emergency reserves as fuel prices rise amid the ongoing Iran war.
The four-month coordinated release, which was welcomed by US President Donald Trump, will be carried out through the International Energy Agency (IEA).
“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,” the G7 said in a joint statement.
The release will begin immediately, with G7 members and their partners expected to carry out a substantial diesel release within the first 20 days.
G7 gives few details on release
The joint statement did not provide a breakdown of how much crude oil, diesel or other petroleum products each country would release.
It also did not identify which countries would participate or specify the exact volumes to be contributed by individual members.
The G7 said it would meet through the IEA in the coming days to discuss whether additional diesel releases would be necessary.
The group also committed to refraining from imposing energy product export restrictions on one another.
Trump welcomes diesel release
Trump welcomed the announcement, saying Europe had agreed to release a large amount of its diesel reserves.
“Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil. The process will begin immediately,” Trump wrote on Truth Social.
The US president has been seeking to bring down domestic fuel prices ahead of the November 3 midterm elections.
Reuters reported that the Trump administration had pressed Germany and France to reduce their emergency diesel inventories, with the possibility of a US diesel export ban raised during discussions.
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Analysts question commitment
Energy market analysts said the announcement appeared to be more political than a detailed, binding release plan.
“This is a political statement rather than a specific and binding commitment with the large headline number intended to persuade President Trump not to impose a diesel export ban,” analysts at Energy Aspects said in a note.
Europe has increased imports of US diesel this year after supplies from Gulf producers were disrupted by the Iran war.
European governments had also discussed a French proposal for European countries to release 50 million barrels of diesel, while IEA members would release another 50 million barrels of crude oil, according to sources familiar with the discussions.
A 50-million-barrel diesel release would represent about 17% of the European Union’s emergency diesel and gasoil stocks, according to Eurostat data. It would amount to roughly 3% of the bloc’s annual consumption.
Oil prices react to release plans
Oil and diesel markets responded to reports of the planned stock release.
US diesel futures fell more than 4% to $4.4491 per gallon, while benchmark European diesel futures dropped by more than $90 per metric ton, according to LSEG data.
The latest move follows the IEA’s record emergency stock release in March, when 400 million barrels of strategic reserves were coordinated among its 32 member countries.
IEA Executive Director Fatih Birol said this week that members had released about two-thirds of those volumes.
The latest G7 decision is aimed at easing pressure on fuel markets as governments contend with supply disruptions and higher energy prices linked to the conflict.
