G7 to Release 100 Million Barrels of Emergency Oil After Trump Threatens Diesel Export Ban

The G7 has agreed to release up to 100 million barrels of diesel and crude oil from strategic reserves over four months, after the United States threatened to ban diesel exports to Europe if countries refused to act. French President Emmanuel Macron announced the decision following an emergency videoconference of G7 leaders, which he chaired as France currently holds the group's presidency.

"We decided to release strategic stocks of diesel and crude oil under the coordination of the International Energy Agency to be able to release up to 100 million barrels within four months," Macron said. He added that G7 members had agreed there would be "no limitation, no export ban between G7 members," noting that US President Donald Trump had been "very clear on this point."

Trump, in a post on Truth Social, said Europe "had just agreed to put on the market a massive quantity of its abundantly stored diesel" and that "the process will begin immediately." Macron said the decisions "should lower fuel prices," which have surged due to the war in the Middle East.

The agreement followed a tense day of negotiations. On Friday morning, France floated a compromise proposal during an emergency meeting of EU energy officials: release 50 million barrels of diesel alongside 50 million barrels of crude from the International Energy Agency's emergency stocks. The formula was a direct response to US pressure. Washington had demanded 100 million barrels, while US Energy Secretary Chris Wright had previously suggested the EU release 120 million barrels over three months as an alternative to a diesel export ban.

"The US demanded 100 million barrels, but the EU is not accepting, and France proposed the 50 + 50 formula," one EU diplomat said. The split is significant because diesel reaches consumers more quickly, while crude must first be refined into fuel. A G7 statement said "substantial" diesel stocks would be made available within the first 20 days.

Not everyone was eager to comply. Germany was reluctant to release any barrels at all, according to two people familiar with the discussions. "Germany and other countries do not want to be used as pawns; they only want to release their stocks for genuine supply security reasons," one source said. Germany and France hold the largest oil and petroleum product reserves in Europe.

The European Commission had earlier pushed back against what it described as US "threats" to force European countries to act. A Commission spokesperson warned that a US diesel export ban would "undermine our confidence in the United States as a reliable partner." The stakes are high: 50 percent of the diesel imported by the EU comes from the United States.

The immediate trigger for the emergency meeting was a surge in diesel prices. Brent crude rose above $100 a barrel on October 1, driven by the deployment of a third US aircraft carrier to the Middle East and China's suspension of fuel exports. In the EU, the pump price of diesel reached a historic weekly average of €2.24 per litre, while in the United States it hit a record $6.53 per gallon. Eurozone inflation climbed to 3.8 percent in September, a three-year high, driven by energy prices.

The G7 package also includes measures to increase refinery output and a pledge to work on reducing refiner margins and transport costs, which have risen sharply due to blockages in the Strait of Hormuz. In March, IEA member states, including EU countries, had promised to gradually release 400 million barrels from their strategic reserves, but not all of that oil has yet been put on the market. Some European representatives at Friday's meeting sharply criticized France and Germany for not having released substantial oil reserves, according to one person present.

For now, the barrels are committed. The diesel is supposed to flow within 20 days. Whether it reaches consumers fast enough to ease the pain at the pump — and whether Trump's threat of an export ban is truly off the table — remains to be seen. The market, at least, reacted positively: US WTI crude fell 5 percent by midday in London as traders anticipated the release.

Written by Sandy van Dongen sandy.vandongen@alpineweekly.com