Macron Calls for Another Emergency Oil Release as Europe Loses Supply

French President Emmanuel Macron is urging the G7 to reconvene and discuss another emergency release of oil stocks as Europe faces dwindling supplies and soaring diesel prices. Speaking on Friday, Macron stated he will convene the G7 countries in the coming weeks to coordinate stock levels, exports and production capacity, and consider tapping into strategic reserves. France is actively seeking to secure diesel, jet fuel, and natural gas supplies for the upcoming months.

Europe has a unique advantage in this situation, as its emergency reserves contain significant volumes of finished fuels such as gasoline and diesel. Currently, Europe's diesel benchmark has surged above $200 per barrel, with taxes driving retail-equivalent costs over $300. Russia has imposed further restrictions on diesel exports, and Middle Eastern product exports remain limited.

The situation worsened Friday when Saudi Arabia's Aramco informed at least two European refiners that they would receive no crude oil under term contracts in October following an attack on its East-West pipeline. Aramco is attempting to restore partial pipeline capacity within days, with full recovery expected to take about six weeks. Meanwhile, the company is utilizing an alternate route through the Persian Gulf and ship-to-ship transfers near Oman, but most of these barrels are destined for Asian refiners.

The G7 has already exhausted a substantial amount of its emergency reserves, releasing over 300 million barrels since March. Global observed inventories continue to lag, with a shortfall of 507 million barrels compared to pre-war levels, after an average drawdown of 2.8 million barrels per day over the past six months. Another release of emergency stocks could quickly provide Europe with both physical barrels and finished fuel, but it cannot remedy the damaged Saudi pipeline, restart Russian refineries, or reopen the Hormuz Strait.