G7 agrees to release 100 million barrels of reserve diesel

On Friday, the G7 nations of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States agreed to release 100 million barrels of reserve diesel and crude oil over the next four months in an attempt to curb soaring fuel prices. This represents roughly one day's worth of global oil demand, with a "frontloaded substantial diesel release" within the first two weeks.

The bloc stated that Iran's ongoing attacks on its regional neighbors and disruptions to international trade, energy security, and the global economy were unacceptable.

The G-7 requested that the International Energy Agency (IEA) monitor the release, following US President Donald Trump's threats of an export ban on US diesel should European countries not take further action to alleviate high global energy costs. Europe imports about 1.5 million barrels of diesel daily, half of which originated from the United States in August. China, another significant diesel supplier, has recently started restricting exports, prompting Europe to acquiesce to Washington's demands.

French President Emmanuel Macron and EU Trade Chief Maros Sefcovic both emphasized the importance of working together to lower fuel prices, including for diesel. Analysts speculate that Trump's aim may be to reduce domestic fuel prices ahead of the November midterm elections, which could potentially see Democrats gain control of Congress. Recent polling shows that only 17% of US adults approve of Trump's handling of the cost-of-living crisis, and only 26% support his overall economic strategy.

Gasoline prices in the United States are currently above $4 per gallon, with diesel prices hovering above $6. It remains uncertain whether the 100 million barrels released over four months will sufficiently alleviate market concerns and bring prices down. The G-7 stated they would convene with the IEA in the coming days to discuss the potential for further diesel releases if necessary.