In short
- The G7 announced it will release 100 million barrels of oil and diesel, beginning immediately and running for four months, including a frontloaded diesel release within the first 20 days.
- The release is coordinated through the International Energy Agency, and the measures rule out export restrictions on energy and energy products between G7 members.
- Brent crude oil briefly fell below $100 a barrel after the announcement before rising back to around $102 by Friday evening; before the US and Israel invaded Iran it traded at around $73.
- UK diesel prices at the pump topped £2 a litre for the first time on Friday, with more than half of UK diesel imported and 31% of those imports coming from the United States.
- US refineries produce roughly four to five million barrels per day, of which Americans consume about 3.6 million, leaving 1.2 million to 1.5 million barrels per day for export, according to the US Energy Information Administration.
The Group of Seven advanced economies announced on Friday that it will release 100 million barrels of oil and diesel from reserves, beginning immediately and running for four months, including a frontloaded diesel release within the first 20 days. The release is coordinated through the International Energy Agency.
The G7 comprises the United States, the United Kingdom, Canada, Japan, Germany, Italy and France, with the European Union also represented. In a joint statement, leaders said they would implement a “co-ordinated release through the IEA of 100 million barrels to begin immediately over four months, including a frontloaded substantial diesel release within the first 20 days”.
The 100 million barrels will comprise a mix of diesel and crude oil. Leaders said there would be no “export restrictions on energy and energy products” between G7 members, and that they would coordinate refinery maintenance schedules to avoid several plants shutting down at the same time.
Why did the US threaten a diesel export ban?
US President Donald Trump had warned he would ban diesel exports from the United States if European countries did not agree to put more of their own stocks onto the market, a stance he had weighed while pressing Europe to release its reserves. That would have eased pressure on prices for US consumers ahead of November’s midterm elections but pushed up prices elsewhere. His Treasury Secretary Scott Bessent argued that US farmers, truckers and businesses “should not be left carrying the burden” as prices rise.
Speaking at the White House after the announcement, Trump said an export ban on diesel was “never really on the table” and that “what Europe did was a great thing”. He had first said he backed a ban early last week and was still considering it on Thursday.
What does the release mean for fuel prices?
The price of global benchmark Brent crude oil briefly dropped below $100 a barrel, but rose back to around $102 by Friday evening. Before the US and Israel invaded Iran, it was trading at around $73.
Matt Smith, director of commodities research at Kpler, said oil had risen again because of renewed strikes between Saudi Arabia and the Houthis in Yemen. “Oil prices were selling off strongly due to the announcement of strategic stock releases in Europe, but they reversed course on rumours of Saudi Arabia planning an offensive into Yemen,” he said.
How exposed is the UK to US diesel?
Over half of the UK’s diesel is imported, with 31% of those imports coming from the United States. UK prices at the pump topped £2 a litre for the first time on Friday. US refineries produce roughly four to five million barrels a day, according to the US Energy Information Administration, of which Americans consume about 3.6 million, leaving 1.2 million to 1.5 million barrels per day for export.
UK Foreign Secretary Ed Miliband, who represented the UK at the meeting, said the measures would “stabilise energy supplies, build resilience in supply chains and shield households and businesses from price shocks”. French President Emmanuel Macron said the action would “bring down the prices of petroleum products, particularly diesel”.
It is not yet clear which partner countries will release stocks, or how quickly. International diesel supplies have been constrained by the conflict in the Middle East, where Iran says it offered the US a deal to reopen the Strait of Hormuz within a week, and by Russia’s own export ban, imposed after Ukrainian attacks on its refineries. G7 leaders said sanctions against Russia would be maintained.
Frequently asked questions
How much oil and diesel is the G7 releasing?
The G7 announced 100 million barrels of oil and diesel, released through the International Energy Agency over four months, including a substantial diesel release within the first 20 days.
Will the US ban diesel exports?
No. Donald Trump said after the G7 announcement that an export ban was “never really on the table”, and the joint statement rules out export restrictions on energy and energy products between G7 members.
Why do diesel prices matter for food prices?
Diesel is used heavily by the haulage industry and in agriculture, so rises in the cost of the fuel feed through into essentials such as food.
How much of the UK’s diesel comes from the United States?
More than half of the UK’s diesel is imported, and 31% of those imports come from the United States. UK pump prices topped £2 a litre for the first time on Friday.
With reporting from BBC News.
Stock image, not from the events described. Globe World — Jo%E3o%20Silas / Wikimedia Commons (CC0 1.0)