100 million barrels of oil and diesel will be released within four months to ease diesel prices after Donald Trump threatened to ban exports. The G7 move aims to stop a further squeeze on fuel costs for households and businesses that depend on transport and agriculture.
Emmanuel Macron said the bloc had agreed to release reserves of up to 100 million barrels under the coordination of the International Energy Agency. He said the coordinated action would “bring down the prices of petroleum products, particularly diesel”.
Trump pressure before Friday
Before Friday, Trump warned he would ban diesel exports if European countries did not agree to put more of their own stocks onto the market. On Friday, he wrote that “Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil. The process will begin immediately.”
The G7 then said its members had agreed to “refrain from export restrictions on energy and energy products” on one another. That matters for the flow of diesel because the package is not only a stock release; it also signals that the bloc does not want members blocking fuel moving across its own markets while prices are elevated.
Ed Miliband on price shocks
Ed Miliband said the measures would “stabilise energy supplies, build resilience in supply chains and shield households and businesses from price shocks”. The release includes a substantial amount of diesel in the coming days, alongside crude oil, so the near-term effect is aimed at the fuel that has been under the most pressure.
Prices at the pump topped £2 a litre in the UK for the first time on Friday. For readers who buy fuel directly, that is the immediate marker: the G7 response was designed to cool the market after the price move had already reached the forecourt.
Diesel Oil and crude mix
100 million barrels will be a mix of diesel and crude oil, so the full amount will not all reach diesel tanks in the same form. The US Energy Information Administration said the US is one of the world's leading diesel suppliers and that domestic refineries churn out roughly four to five million barrels every day, which shows the scale of supply already moving through the system.
The practical question now is how quickly and in what proportions the diesel and crude oil will reach the market. The answer will determine whether the release eases transport and farm fuel costs quickly, or only gradually as the barrels are drawn down over the four-month window.
