The G7 and its partners have agreed to release as much as 100 million barrels of emergency diesel and crude stocks over the next four months, putting government inventories into a fuel market that has been running short of refinery output for months.
French President Emmanuel Macron said Friday that the release would be coordinated through the International Energy Agency, with an emphasis on diesel. European countries had discussed releasing 50 million barrels of diesel while IEA members would supply another 50 million barrels of crude.
President Donald Trump welcomed the move after his administration pressed Europe to draw down its emergency stocks and floated restrictions on U.S. diesel exports.
“Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil. The process will begin immediately,” Trump wrote on Truth Social.
The market reacted immediately. European gasoil futures fell more than 4% Friday, while Brent dropped about $3 to below $100 per barrel. Diesel’s premium over crude fell to roughly $69 per barrel from $76.77 on Thursday.
There is plenty for these reserve barrels to work on.
U.S. diesel prices recently reached a record $6.50 per gallon. European diesel futures have traded above $200 per barrel. Middle Eastern refinery outages, Russian refinery damage, and export restrictions have removed millions of barrels of product supply, and Chinese refiners have suspended October fuel exports to preserve domestic stocks.
Europe also has a direct interest in using the stocks. It consumes more diesel than it produces and has become increasingly dependent on U.S. imports. A U.S. export ban would tighten European supply further while potentially forcing American refiners to cut runs once domestic storage is filled.
The release buys time. It puts physical diesel into the market during a period of acute shortage and takes some pressure off prices.
It does not, however, add refinery capacity.
The IEA already coordinated a 400-million-barrel emergency release in March after the Iran war began, with about two-thirds of those barrels released so far. The G7 statement indicates that the 100 million barrels will help complete the emergency-release commitments made in March, rather than a clearly additional 100-million-barrel tranche.
Emergency inventories can bridge a supply disruption. The underlying diesel shortage still depends on getting damaged and idled refineries back into service.
By Julianne Geiger for Oilprice.com
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