G7 Nations Agree to Release 100 Million Barrels of Strategic Reserves to Stabilise Fuel Markets

G7 member countries agreed on Friday to release 100 million barrels of diesel and other reserves through the International Energy Agency to help stabilise markets. A joint leaders' statement, released by the office of French President Emmanuel Macron, said G7 members agreed to begin the release immediately and continue over four months, including a front-loaded substantial diesel release within the first 20 days by members and partners.

Oil prices softened after the announcement, with Brent crude trading 1.48 per cent lower at $100.8 per barrel. West Texas Intermediate, which tracks US crude, traded 2.66 per cent lower at $90.40 per barrel.

Data from intelligence firm Kpler showed oil flows through the Strait of Hormuz rising to near prewar levels as oil producers navigate alternative modes to transport fuel out of the region and the US military escorts some vessels. Kpler data showed at least 16.5 million barrels per day left the Middle East in September. “Oil shipment figures have improved in recent days, and between Hormuz and the Yanbu pipeline … we are seeing three-quarters of the prewar volumes moving today,” Mr Macron said after a call with G7 leaders.

Leaders also condemned Iran's attacks against its neighbours in the region, while reaffirming they would maintain their sanctions against Russia. Moments before the statement was released, US President Donald Trump said in a social media post that Europe had just agreed to release a massive amount of their heavily stocked diesel oil.

The conflict in the Middle East and Russia's war against Ukraine have triggered a surge in global diesel prices, amplifying political pressure on Mr Trump at home before the midterm elections next month. Diesel prices in the US hit $6.50 per gallon last week, nearly $3 higher than the same time last year. Europe is also facing higher diesel prices, which hit a record of €2.24 per litre, compared to €1.59 before the Iran war began on February 28.

The Trump administration had been pressuring Europe to release its diesel stocks. Last week he again pressed Ukraine to halt its attacks on Russian diesel facilities. On Thursday, Treasury Secretary Scott Bessent urged the continent to immediately tap its reserves. Mr Trump has also threatened a US diesel ban in a bid to ease prices, triggering concerns from the American energy industry.

G7 leaders said they reaffirmed their commitment to refrain from placing export restrictions on energy and energy products between G7 members and also urged producers to refrain from imposing bans. Mr Macron said Mr Trump did not threaten to issue an embargo on US diesel, classifying the discussion as a constructive one.