The Group of Seven has begun rolling out a coordinated emergency release of 100 million barrels of crude oil and diesel, a four-month drawdown from strategic reserves that its members hope will relieve pressure on strained global supply chains. The plan, agreed after a video conference of leaders chaired by French President Emmanuel Macron, commits the group to a “substantial diesel release within the first 20 days,” with further releases to be discussed through the International Energy Agency in the coming days.
The operational details set out in the group’s joint statement read like a logistics coordination exercise. Beyond the headline volume, members pledged to “coordinate maintenance schedules across G7 refineries to prevent simultaneous capacity shutdowns and temporarily increase utilization rates where feasible.” The statement also urged member countries to refrain from imposing export restrictions on energy products among themselves, a measure aimed at keeping fuel moving across borders during the release window. How many barrels each individual member will contribute remains unclear.
The release comes as the machinery of global diesel supply has broken down at several points at once. Neil Atkinson, the former head of the International Energy Agency’s Oil Industry and Markets Division, told Al Jazeera that three disruptions have cut global diesel supply. Diesel is no longer flowing from the Middle East to Europe, which previously drew heavily on shipments from Saudi Arabia and Kuwait. Russia has ceased exporting diesel entirely after attacks by Ukraine on Russian refineries. And China is no longer exporting diesel either. Demand, meanwhile, remains relatively high and is expected to stay high because of the agricultural harvesting season.
The scale of the affected flows is significant. According to data from the Joint Organizations Data Initiative and OPEC, the US is the world’s largest producer and exporter of diesel, producing about 240.5 million tonnes and exporting roughly 1.26 million barrels per day. Russia is the second-largest exporter at 783,400 barrels per day, while Saudi Arabia is the second-largest producer at 58.4 million tonnes, much of which it consumes domestically.
Prices have moved sharply as those supply lines have faltered. Oil prices jumped on Thursday, settling up more than $4 a barrel, and global diesel hit a record high last Friday, with the average gallon (3.79 litres) costing $6.50, up from $5.61 a month earlier, according to the American Automobile Association. After the G7 announcement, Brent crude briefly dropped below $100 a barrel before rising back to about $102 in the evening.
Whether the release can actually stabilise the market is the open question. Hamad Hussain, a climate and commodities economist at Capital Economics, told Al Jazeera that the emergency release “will put some downward pressure on prices, particularly global diesel prices,” but that the impact “would be short-lived given that this is just a temporary solution to the supply crunch.” Atkinson was similarly measured, saying the release is welcome but “doesn’t deal with the fundamental problem that the global supply remains lower than normal.” Seven months after the war in the Middle East began, he noted, global supply of crude and products remains significantly below pre-war levels, and attention has shifted to end use, mainly diesel.
The American role in the process has shifted week to week. Earlier this week the Trump administration threatened a ban on US diesel exports and pressed Europe to tap its emergency stocks, with Treasury Secretary Scott Bessent urging Europe to act “immediately.” On Friday, however, Trump told reporters at the White House that no export ban would be imposed, saying the plan was never really on the table. On his Truth Social platform he wrote that Europe had agreed to release “a massive amount” of its diesel stocks and that the process would begin immediately. The White House is also reportedly preparing an executive order on record-high US diesel prices, possibly as early as next week, according to two people familiar with the process who spoke to Reuters.
Frederic Schneider, a nonresident senior fellow at the Middle East Council on Global Affairs, told Al Jazeera that with US diesel inventories at their lowest seasonal level since records began in 1982, and reserves being drawn down, the only way to bring more diesel to the US market would be to export less. He added that diesel’s role in the productive economy makes its price movements unusually far-reaching: it fuels trucks, freight trains, ships, tractors, harvesters, construction machinery, mining equipment and backup generators, so a diesel price shock spreads into food, building materials and anything delivered by truck. Farmers are hit twice, with diesel and fertiliser prices both pushed up by the closure of the Strait of Hormuz. A higher diesel price, he said, acts like a tax on production and logistics, risking stagflation by lifting inflation while squeezing margins in transport and agriculture.
For now, the release begins immediately and runs for four months. Whether it holds prices down beyond that window depends on supply that has not yet been restored.