The Group of Seven (G7) nations have agreed to coordinate the release of 100 million barrels of oil and refined fuel products from emergency reserves in an effort to ease pressure on global energy markets as fuel prices surge.
The release will be coordinated through the International Energy Agency (IEA) and will begin immediately, with the programme spread over four months. A substantial amount of diesel is expected to enter the market within the first 20 days as part of a front-loaded release by G7 members and partner countries.
The agreement was reached during a virtual meeting of G7 leaders chaired by French President Emmanuel Macron. The move follows mounting pressure from the United States for coordinated action as diesel prices have reached record levels in the US and Europe.
Diesel stocks to be released first
The immediate focus will be on diesel, which has faced particularly severe supply and price pressures.
The G7 statement said the group would implement a coordinated IEA release of 100 million barrels, while bringing forward a substantial diesel release during the first 20 days. The leaders also agreed to assess whether additional diesel releases are required in the coming days.
The exact breakdown between crude oil, diesel and other petroleum products was not specified in the G7 statement.
The announcement follows discussions in Europe over a proposal to release 50 million barrels of diesel from European emergency stocks, alongside a 50-million-barrel crude oil release involving IEA members.
US pressure and diesel export concerns
The agreement came after the administration of US President Donald Trump pushed European countries to draw down their emergency diesel inventories.
Washington had warned that it could restrict US diesel exports if European countries did not take greater action to ease global fuel shortages. Europe has become increasingly dependent on US diesel supplies after disruptions to fuel flows from Gulf producers.
Trump subsequently said the United States would not impose a diesel export ban. He described the European stock release as a major contribution and said the process would begin immediately.
The G7 statement also reaffirmed a commitment by members to refrain from imposing energy export restrictions on one another and called on other producers to avoid measures that could worsen market tensions.
Fuel prices hit record levels
The emergency release comes as fuel markets face significant disruption linked to the ongoing conflict involving Iran and instability around key energy supply routes.
US diesel prices recently reached record levels. According to AAA data cited by The Associated Press, the national average for diesel stood at $6.37 a gallon on October 2, after reaching a record $6.52 on September 22. Diesel prices have also reached records in parts of Europe.
The G7 said its measures were intended to stabilise immediate energy supplies, protect households and businesses from price shocks and strengthen the resilience of global energy markets. The group has also called for increased refinery utilisation and coordination of maintenance schedules to prevent simultaneous shutdowns of refining capacity.
IEA to monitor impact of release
The latest announcement follows a much larger emergency stock-release agreement reached by IEA members in March.
The IEA's 32 member countries had agreed to release 400 million barrels of oil and petroleum products, the largest such release in the agency's history. IEA Executive Director Fatih Birol said earlier this week that roughly two-thirds of that commitment had been released, leaving part of the agreed stocks yet to reach the market.
The G7 has asked the IEA to monitor the implementation and impact of the latest measures. A follow-up report is expected within 20 days and will include recommendations on future responses and the replenishment of emergency reserves.
The G7 leaders also linked the current energy disruption to the situation around the Strait of Hormuz, calling for the restoration of navigational rights and the free flow of international commerce through the waterway.
The coordinated release is expected to add liquidity to fuel markets, although the extent and duration of any impact on prices will depend on the scale of the releases, refinery output and developments affecting global oil supplies.