G7 Agrees to Release 100 Million Barrels of Oil and Diesel to Curb Soaring Prices

The Group of Seven (G7) nations has reached an agreement to release 100 million barrels of crude oil and diesel from emergency reserves over a four-month period. This coordinated move, managed through the International Energy Agency (IEA), comes under significant pressure from US President Donald Trump to alleviate skyrocketing global energy costs.

The surge in oil and diesel prices has been driven by the ongoing conflict between the US and Israel against Iran, which has disrupted energy exports from the Gulf region, as well as Russian attacks on Ukrainian infrastructure and subsequent Ukrainian strikes on Russian energy facilities. On Thursday, oil prices rose more than $4 a barrel, while global diesel averages hit a record $6.50 per gallon, according to the American Automobile Association (AAA), up from $5.61 the previous month.

In a joint statement issued Thursday, the G7, which includes the US, UK, Canada, Japan, Germany, Italy, and France, along with EU representation, announced that a “substantial diesel release” would occur within the first 20 days of the operation. The group also stated it would hold discussions in the coming days regarding additional diesel releases if necessary.

The announcement follows a video conference chaired by French President Emmanuel Macron on Friday. “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 statement read. Earlier in the week, IEA Executive Director Fatih Birol indicated that members had already released approximately two-thirds of a previously agreed-upon 400-million-barrel target.

The G7 further agreed to coordinate maintenance schedules across member refineries to prevent simultaneous capacity shutdowns and to temporarily increase utilization rates where feasible. Member countries were also urged to refrain from imposing export restrictions on energy products among themselves.

The decision follows intense diplomatic maneuvering from Washington. The Trump administration had previously threatened to ban US diesel exports unless European nations tapped their emergency reserves. However, on Friday, Trump told reporters at the White House that the export ban was never a serious option, stating, “We’re not going to be doing the export ban. We’re going to be doing what we’re supposed to do.” He later posted on Truth Social that Europe had agreed to release a “massive amount” of its diesel stocks.

Despite the initial drop in Brent crude prices below $100 a barrel following the announcement, the benchmark briefly rebounded to around $102 later in the evening. Market analysts suggest the impact may be temporary. Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, told Al Jazeera that while the release was “very much needed,” it primarily served to ease immediate pressure rather than resolve structural issues.

Neil Atkinson, former head of the IEA’s Oil Industry and Markets Division, emphasized that the release does not address the fundamental supply deficit. He noted that global diesel supply has declined due to three main factors: the cessation of Middle Eastern diesel exports to Europe, Russia’s halt on diesel exports due to Ukrainian refinery attacks, and China’s停止 of diesel exports. With demand remaining high due to the agricultural harvesting season, Atkinson stated that global crude and product supplies remain significantly below pre-war levels.

Frederic Schneider, a senior fellow at the Middle East Council on Global Affairs, warned that high diesel prices pose a broader economic threat. Unlike gasoline, which primarily affects consumers, diesel powers trucks, ships, trains, and agricultural machinery. Consequently, diesel price shocks propagate into the cost of food, building materials, and logistics, potentially leading to stagflation—simultaneous inflation and stagnant growth—which complicates central banks’ monetary policy decisions.

As US diesel inventories sit at their lowest seasonal level since records began in 1982, the White House is reportedly preparing an executive order to address record-high domestic diesel prices, potentially to be unveiled next week.