G7 Agrees 100-Million-Barrel Oil Release, Led by Diesel, as Fuel Prices Bite

The Group of Seven economies agreed on Friday to release 100 million barrels of emergency oil and fuel stocks over the next four months. Diesel comes first: the group promised a "substantial" release of the fuel within the first 20 days, after its price hit records on both sides of the Atlantic.

The International Energy Agency will coordinate the release. French President Emmanuel Macron, whose country holds the rotating G7 presidency, announced it after chairing a videoconference of leaders. US President Donald Trump said on social media that the process would begin immediately.

Why diesel is the pressure point

Crude prices have risen during the eight-month war involving Iran, but refined products have climbed even faster. Refineries damaged in the Gulf, blocked export routes, and Russia's ban on fuel exports after Ukrainian drone strikes on its plants have all cut the supply of diesel available to world markets. China's decision to cancel some October fuel cargoes has tightened things further.

In the United States, the average price of a gallon of diesel was about $6.37 on Friday, according to motoring group AAA. It hit a record of roughly $6.52 on September 22. In Europe, diesel futures have at times traded above $200 a barrel, a level traders say is starting to hurt demand.

Markets reacted quickly. Diesel's premium over crude, a closely watched gauge of how tight fuel supply is, dropped to around $69 a barrel from nearly $77 on Thursday. Brent crude futures and European diesel prices also fell after the announcement.

A deal shaped by a US threat

Washington had pushed hard for the release. In recent weeks the Trump administration raised the prospect of banning US diesel exports if Europe did not release more of its own reserves. Europe uses more diesel than it refines and depends heavily on imports, so a ban would have hit it hard.

Under Friday's agreement, G7 members committed not to restrict energy exports to one another, and they urged all producers to avoid bans that could unsettle markets further. Analysts have warned that a US export ban might lower domestic prices briefly but could later backfire by forcing refiners to cut overall output.

The release adds to a much larger IEA action in March, shortly after the Iran war began, when member countries pledged roughly 400 million barrels. Washington has since criticised Europe for being slow to make those barrels available. The G7 statement suggested the new 100 million barrels may include volumes promised in March that have not yet reached the market.

US politics is part of the backdrop. Trump's Republicans face midterm elections on November 3, and polling shows voters unhappy with his handling of the economy as fuel costs stay high.

What it means for India

India is not part of the G7 release, but it buys more than 85% of its crude from abroad, so any easing in global prices matters. A narrower diesel margin also helps state-run refiners, which sell fuel domestically at regulated prices. Indian markets were closed on Friday for Gandhi Jayanti, so oil marketing stocks and the rupee will get their first chance to react on Monday.

Whether the relief lasts is uncertain. A four-month release can ease a shortage of refined fuel, but it cannot rebuild the refining capacity lost to the wars in the Gulf and Ukraine.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.