A fresh bid to cool surging fuel costs is taking shape after the G7 agreed to tap strategic stockpiles, a move European Commission President Ursula von der Leyen praised as a show of allied unity aimed at easing pressure on consumers and industry.
In a statement, the G7 said it would carry out a coordinated release of 100 million barrels of diesel and crude oil from strategic reserves in the coming months, working through the International Energy Agency (IEA) to help stabilise global energy markets.
“We welcome the decision of G7 countries not to impose any export bans on allies and the continued solidarity between partners. We support an IEA-coordinated release of fuel stocks,” Ms von der Leyen wrote on X.
Markets reacted quickly. US oil prices fell sharply — down as much as 5% at one stage — while Brent crude, the main international benchmark, briefly slipped back below $100 a barrel.
The latest initiative comes after the Iran war prompted the largest emergency stock release on record: 400 million barrels in March, coordinated by the IEA.
It remains unclear how much of the petroleum covered by the new agreement will be drawn from what is still available from that March pact.
IEA Executive Director Fatih Birol said this week that member countries had already released about two-thirds of the 400-million-barrel programme.
According to the G7 statement, the new release will start immediately and run for four months, with a significant portion of diesel set to come onto the market within 20 days from G7 members and partners.
The group did not outline how the 100 million barrels would be split between crude, diesel and other products, nor did it specify which countries would take part.
“We will convene in the context of the IEA in the coming days to discuss the possibility of additional diesel releases as necessary,” the G7 statement added.
A further release could be possible depending on an upcoming meeting of the IEA
Earlier, US President Donald Trump welcomed the move after previously warning he could restrict US diesel exports unless France and Germany released part of their own stocks.
“Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil. The process will begin immediately,” Mr Trump posted on his Truth Social network.
Mr Trump is pushing to reduce fuel prices ahead of November midterm elections in the US. He is contending with a career-low 32% approval rating, and just 17% of voters back his handling of the cost of living.
The G7 decision followed intense diplomatic efforts, driven in part by Mr Trump’s export-ban threat and by the need to ease European price spikes that are worsening a broader cost-of-living crisis.
During the week, Mr Trump had said he would act unless France and Germany released 120 million barrels of diesel — a volume that would have represented 40% of their total reserves.
After a call yesterday involving France, the European Commission, Ireland, Italy, Germany and the UK, the EU’s Energy Union task force held an emergency meeting this morning.
The Irish presidency of the European Union then convened an emergency meeting of EU ambassadors for this afternoon, around the same time French President Emmanuel Macron called a gathering of G7 leaders, including Mr Trump.
In a statement issued after that leaders’ meeting, the G7 said it would coordinate maintenance schedules across refineries to avoid simultaneous shutdowns, and urged countries with refining capacity to increase output.
“We will implement our commitments with a coordinated 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 by G7 members and partners,” said the statement, released by the office of French President Emmanuel Macron.
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G7 release only a ‘short-term’ measure – professor
A Professor of Sustainability at University College Cork has described the G7’s release of diesel and oil reserves as a “short-term” measure, while warning that the world is still heading into a stretch of elevated oil prices.
Speaking on RTÉ’s Six One, Prof Brian Ó Gallachóir said the medium-term route to easing the supply shock would require the US and Israel to cease attacks on Iran.
“It’s really a short-term measure. What they’ve agreed is to release 100m barrels of strategic reserves.
“That will be over a four-week period and there’ll be a particular front loading of diesel over the next 20 days. So, it is significant,” Prof Ó Gallachóir said.
He added: “Just to put that quantity into context, at the moment, the blockade at the Strait of Hormuz is blocking between 15-20m barrels every day in terms of really impacting and restricting the supply of oil.
“And that’s what’s causing these significant oil prices.
“So, to dampen down the prices in a longer-term way, I mean, essentially the US and Israel need to stop the attacks on Iran and enable the opening up of the Strait of Hormuz.”
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Prof Ó Gallachóir said Ireland should curb its reliance on oil, arguing the country’s exposure is “crippling us in terms of the cost of living crisis”.
“There’s going to be so much of the budget taken up with measures to dampen down the effects of what’s happening because of what’s happening geopolitically, but it’s linked to our dependence on oil.
“So, if we wean ourselves off oil, it puts us in a much stronger position to be able to plan more rationally going forward in terms of our energy costs,” he said.
He also cautioned that any near-term price relief could be limited by damage to Gulf refining infrastructure from Iranian strikes during the war, which could slow the conversion of crude into fuels.
“Initially it was the flow of oil was what was blocked. But then with the attacks on both sides, we had attacks on infrastructure.
“So, the ability to refine the oil, to turn the crude oil into the things that we use, petrol, diesel and kerosene. Those things will really take time to recover.
“This short-term blip in terms of releasing the strategic reserves will certainly dampen down prices in the short term.
“But we are facing into a period of high oil prices and weaning ourselves off oil is really the only long-term strategy that we can pursue.”
Additional reporting Reuters, AFP
