G7 agrees 100 million-barrel emergency oil release amid US pressure over diesel

G7 nations have reached an agreement to release up to 100 million barrels of oil from strategic reserves over a four-month period to alleviate the impact of rising energy prices, with a specific focus on diesel. The International Energy Agency (IEA) will oversee the coordinated release, which will see a substantial amount of diesel become available within the first 20 days, as outlined in a G7 statement.

French President Emmanuel Macron, currently leading the G7, stated that the countries have agreed to act jointly to ease pressure on energy prices. The move comes in response to mounting pressure from Washington for countries to release strategic reserves, as diesel prices have been rising and supplies have tightened. Earlier on Friday, the European Commission had expressed concerns over what it called US threats to force European countries into action.

However, an overnight call between Macron and US President Donald Trump appears to have swung Paris towards committing to the release.

The G7 package also encompasses measures to boost refinery output and a commitment not to restrict trade in energy and oil products among partner countries. The 100 million barrels would equate to approximately 830,000 barrels per day if released evenly over the four-month period. However, the actual impact will hinge on how swiftly countries discharge their stocks and the extent to which the oil can ultimately be converted into diesel.

The release of strategic crude does not immediately result in extra diesel supplies, as refineries must first process the crude, with factors such as capacity, logistics, and the type of crude available influencing how much fuel reaches consumers. The release could provide some breathing room prior to the winter months, when demand for diesel and other refined products typically surges.