G7 agrees to release up to 100m barrels of emergency fuel reserves

G7 leaders will release up to 100 million barrels of emergency diesel and crude oil from their strategic stockpiles, French President Emmanuel Macron confirmed on Friday after a video meeting. The drawdown, coordinated by the International Energy Agency, will take place over four months. Macron said the aim was to coordinate efforts to lower petroleum product prices, especially diesel.

The decision follows pressure from US President Donald Trump, who had urged European countries to release emergency supplies or face a US diesel export ban. Trump has said he is considering stopping diesel exports to lower domestic fuel prices before November's midterm elections. Europe produces about 70% of the diesel it consumes but relies on imports for the rest, making a US ban a significant threat.

Under the agreement, a substantial diesel release will be front-loaded within the first 20 days. G7 members also agreed to make production more flexible so refineries can operate at maximum capacity, and committed to not restricting energy or petroleum product exchanges between partner countries. Macron said all members committed to avoiding export bans, and Trump was clear on this point.

In the UK, the average price of diesel reached a record £2 a litre on Friday, according to the RAC motoring group. Filling an average family car now costs £110, nearly £32 more than before the Iran war. Simon Williams, head of policy at the RAC, called it a pump price threshold no one wanted to cross.

Trump welcomed the move on his Truth Social platform, saying Europe had agreed to release a massive amount of diesel and that the process would begin immediately. However, Walt Chancellor of Macquarie Group argued the release would not address the core issue, which he described as a global energy problem. He said the solution was more oil flowing through the Strait of Hormuz and out of the Middle East, adding that anything short of that was shuffling deck chairs.

The IEA previously ordered its largest-ever release of government oil reserves in March, agreeing to 400m barrels of emergency crude after US-Israeli attacks on Iran. That was a third of the group's total stockpiles and more than double the 182m barrels released in 2022 after Russia's invasion of Ukraine. Brent crude was trading just above $100 a barrel on Friday, compared with about $72 before the Iran war began.