BRUSSELS: Group of Seven (G7) countries have agreed to coordinate the release of 100 million barrels of crude oil and diesel from emergency reserves, seeking to ease fuel-market pressures linked to the ongoing Iran conflict.
In a joint statement issued on Friday, the G7 said the release would be coordinated through the International Energy Agency (IEA) and would begin immediately, continuing for four months. Members and partner countries will frontload a substantial portion of the diesel release within the first 20 days.
The G7 did not specify the precise volumes of crude oil, diesel and other petroleum products to be released or identify which countries would contribute stocks.
The group said it would meet through the IEA in the coming days to consider whether additional diesel releases would be necessary.
US President Donald Trump welcomed the decision, saying Europe had agreed to release a large quantity of diesel from its reserves. The move comes as his administration seeks to contain rising fuel prices ahead of the November 3 midterm elections.
According to Reuters, the US administration had urged Germany and France to draw down emergency diesel inventories, with the possibility of restrictions on US diesel exports reportedly raised during discussions.
The G7 statement also said member countries would refrain from imposing energy-product export restrictions on one another.
Analysts at Energy Aspects described the announcement as primarily a political commitment rather than a specific binding release mechanism, suggesting the headline figure was intended partly to address US concerns over fuel prices and potential export restrictions.
Europe has increased imports of US diesel this year as supplies from Gulf producers have been disrupted by the Iran conflict.
Earlier on Friday, European governments discussed a French proposal for European countries to release 50 million barrels of diesel, while IEA members would release another 50 million barrels of crude oil, according to people familiar with the discussions.
A 50-million-barrel diesel release would represent approximately 17% of the European Union’s emergency diesel and gasoil stocks, equivalent to around 3% of the bloc’s annual consumption, according to Eurostat data.
Oil markets reacted to reports of the planned release, with US diesel futures falling more than 4% to $4.4491 per gallon, while benchmark European diesel futures declined by more than $90 per metric ton, according to LSEG data.
The latest move follows a much larger emergency stock release coordinated by the IEA in March. The 32-member agency coordinated the release of 400 million barrels from strategic reserves.
IEA Executive Director Fatih Birol said earlier this week that member countries had so far released around two-thirds of those volumes, highlighting the continued pressure on global fuel markets.
By Reuters
