- G7 countries will coordinate the release of 100 million barrels over four months.
- A substantial amount of diesel will be released within the first 20 days.
- UK diesel prices have climbed above £2 a litre amid a global supply squeeze.
The G7 has agreed to release 100 million barrels of oil and petroleum products in an effort to ease a global supply squeeze that has sent diesel and other fuel prices sharply higher.
The coordinated release by the US, UK, Canada, France, Germany, Italy and Japan will be carried out through the International Energy Agency (IEA) over the next four months, with a substantial amount of diesel to be released within the first 20 days.
The agreement comes after weeks of pressure on governments to release emergency fuel stocks as disruptions to global energy supplies have tightened markets.
The G7 also agreed to refrain from imposing export restrictions on energy and energy products on one another, removing the immediate prospect of a US ban on diesel exports.
The United States had threatened to restrict diesel exports if European countries did not release more of their own reserves. US President Donald Trump said on Friday that European countries had agreed to release their stocks.
“Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil. The process will begin immediately,” Trump said in a post on Truth Social.
He later said the US would not impose an export ban, describing the idea as something that was “never really on the table”.
The agreement could offer some relief to countries that depend heavily on imported diesel, including the UK.
Why diesel is under pressure
Diesel has become one of the biggest pressure points in the global energy market.
The fuel is critical to road freight, agriculture, construction and other industries, meaning higher diesel costs can eventually feed into the price of goods and services.
UK pump prices have already crossed £2 a litre, adding pressure on households and businesses.
The US is an important supplier to the international diesel market. Its refineries produce roughly four to five million barrels of diesel and other distillate products a day, with domestic consumption accounting for around 3.6 million barrels and exports making up much of the remainder.
The European market is particularly exposed to changes in US supplies. According to the IEA, the US supplied around half of the European Union's diesel imports in August.
The current squeeze has been worsened by disruptions to supplies from Russia and China, as well as instability around key shipping routes in the Middle East.
The IEA has warned that refined-product flows remain severely constrained. Gulf and Russian diesel exports in August were about 1.6 million barrels a day below February levels, according to the agency.
The latest G7 move follows a much larger emergency stock release announced earlier in the year.
IEA member countries agreed to make 400 million barrels available after disruptions linked to the conflict in the Middle East. The agency said more than 80 per cent of that earlier commitment, around 325 million barrels, had already been released by the end of September.
The latest G7 agreement will therefore add another significant supply injection at a time when refiners and governments are already drawing on emergency stocks.
What it means for the UK
For the UK, the immediate issue is diesel.
Britain relies heavily on imports to meet its demand for refined fuels, leaving domestic prices exposed to disruptions in international supply. Higher wholesale costs also feed into transport and logistics expenses, with potential knock-on effects for food and other essentials.
UK Foreign Secretary Ed Miliband said the measures would help “stabilise energy supplies, build resilience in supply chains and shield households and businesses from price shocks”.
French President Emmanuel Macron said the coordinated release would help “bring down the prices of petroleum products, particularly diesel”.
But the intervention does not guarantee that prices will fall immediately.
Oil markets remain sensitive to developments around major shipping routes and geopolitical tensions. Brent crude climbed above $102 a barrel this week after reports that the US was deploying another aircraft carrier strike group to the Middle East.
The benchmark later eased after the G7 announcement, but remained significantly above the roughly $73 level recorded before the US and Israel launched military action against Iran in late February.
The Strait of Hormuz and the Bab el-Mandeb remain particularly important to the outlook. Any further disruption to shipping through these routes could offset some of the impact of the emergency stock release.
Matt Smith, director of commodities research at Kpler, said oil prices had initially fallen sharply following news of strategic stock releases before recovering on reports of possible further military action involving Saudi Arabia and 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 as it looks to re-establish a safe path via Bab-Al-Mandeb,” Smith said, as quoted by the BBC.
The G7's decision therefore gives governments an additional buffer, but the wider supply problem has not disappeared.
For motorists, hauliers and businesses, the key question will be how quickly the additional diesel reaches the market — and whether the release is large enough to counter further disruptions to global supplies.
