G7 to release 100 million barrels of diesel to lower prices

On Friday, the Group of Seven (G7) announced a coordinated release of 100 million barrels of diesel from strategic reserves through the International Energy Agency (IEA), a move that follows weeks of pressure from the United States and a growing urgency to curb soaring fuel costs. The decision, made amid a backdrop of supply disruptions linked to the Iran conflict and a Russian export ban, signals a rare convergence of European and American interests on an issue that has become a flashpoint for the forthcoming U.S. Mid‑term elections.

The announcement surfaced after a series of high‑level exchanges. On Thursday, the U.S. Administration sent a message to France and Germany, urging them to release diesel from emergency inventories or face a potential ban on American diesel exports. The call came as U.S. Diesel prices had surged sharply since the Iran war began, making the issue a political lightning rod for President Trump’s campaign team.

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European officials, in turn, convened an emergency meeting of the EU’s Energy Union task force. The European Commission, led by President Ursula von der Leyen, welcomed the G7 decision and stressed that the release would be coordinated through the IEA. The Commission also rejected any U.S. Export ban, describing it as “unnecessary” and “counter‑productive.”

France’s President Emmanuel Macron, who holds the G7 presidency for this cycle, chaired a videoconference with G7 leaders that afternoon. The French government had floated a proposal to release 50 million barrels of diesel from its strategic reserves, a figure that would represent roughly 17 % of the EU’s emergency diesel stocks. The proposal also called for IEA members to add another 50 million barrels of crude oil to the market.

In the same day, the U.S. Treasury Secretary Scott Bessent urged European allies to “immediately” tap their reserves, while Energy Secretary Chris Wright expressed confidence that Europe could help ease global diesel prices. The U.S. Administration’s push was framed as a necessity to protect American consumers and businesses from the high fuel costs that have been a political liability ahead of November’s mid‑term elections.

While the G7’s 100 million‑barrel release is a headline, it is not the only figure in play. The U.S. Administration has reportedly asked Europe to release 120 million barrels of diesel over six months, a number that would represent a larger portion of European emergency stocks. The European Commission’s spokesperson clarified that any release would be coordinated through the IEA and that the EU would not accept a unilateral U.S. Ban on diesel exports.

These developments come against a backdrop of ongoing supply disruptions. The U.S. And Israel’s military actions against Iran have curtailed Middle Eastern diesel exports, while Russian refineries have been hit by Ukrainian drone strikes, prompting a temporary ban on diesel exports. China has also suspended most fuel‑product exports outside Hong Kong and Macau. Together, these factors have tightened the global diesel market and pushed prices to record levels.

In March, the IEA coordinated the largest ever release of emergency oil reserves, making 400 million barrels available to the market. The IEA’s executive director, Fatih Birol, later reported that members had already released about two‑thirds of those volumes. The new G7 release would therefore be the second major coordinated draw‑down in the same year, underscoring the severity of the current supply shock.

EU officials stress that releasing strategic reserves will reduce the emergency buffer that protects member states against future supply shocks. The European Commission’s Oil Stocks Directive requires member states to maintain emergency crude oil or petroleum‑product stocks equivalent to at least 90 days of net imports or 61 days of domestic consumption, whichever is higher. The decision to draw down reserves, therefore, carries a risk of leaving the bloc more vulnerable if the Iran conflict escalates or if other supply disruptions occur.

In the United States, the threat of a diesel export ban has been a recurring theme. Energy Secretary Chris Wright has repeatedly said that a ban would not be beneficial, while Treasury Secretary Scott Bessent has maintained that the U.S. Can help lower global prices by encouraging European releases. The U.S. Administration’s position seems to hinge on the political cost of high fuel prices, which could affect the President’s re‑election prospects.

Looking ahead, the next key event is a G7 leaders’ meeting scheduled for mid‑October. European leaders will likely discuss whether to expand the release beyond the initial 100 million barrels and whether to impose additional conditions on the IEA’s coordination. The U.S. Administration will monitor the outcome closely, as any sign of a U.S. Export ban could trigger a sharp rise in global diesel prices.

Meanwhile, European governments are preparing to address the immediate question of how to balance the release of strategic reserves with the need to maintain a safety net for the winter heating season. The European Commission has indicated that it will coordinate any further releases through the IEA, and that it will seek assurances that U.S. Diesel exports will remain unrestricted.

As the world watches the unfolding negotiations, the stakes are high. A successful coordinated release could provide temporary relief to consumers and businesses in both Europe and the United States. A failure to reach an agreement could leave the global diesel market exposed to further volatility, especially if the Iran conflict intensifies or if supply disruptions continue on the Russian and Chinese fronts.

What to Watch Next

• Mid‑October G7 leaders’ meeting: potential expansion of diesel release.
• European Commission’s final stance on U.S. Export ban assurances.
• U.S. Treasury and Energy Departments’ next moves: whether a ban is implemented or retracted.