G7 turns to 100 million barrels of emergency fuel as diesel costs bite

Filling an average family car with diesel now costs £110 in Britain, nearly £32 more than before the Iran war, according to the RAC motoring group. That pressure on household budgets has become an international supply crisis. G7 nations have agreed to release up to 100 million barrels of emergency diesel and crude oil reserves as they try to cool prices and prevent a threatened US diesel export ban, according to Guardian Business (direct).

French President Emmanuel Macron announced the agreement after crisis talks on Friday. Macron, the current G7 chair, convened the leaders’ video call after Donald Trump threatened to stop US diesel shipments unless Europe used its own emergency stocks. Proposals reportedly prepared by Macron call for 50 million barrels of diesel and 50 million barrels of crude to enter the market. Strategic reserves are government-held supplies kept for emergencies.

Emergency stocks replace an export showdown

Macron said G7 members and their partners would bring forward a substantial diesel release within the first 20 days. He also said participants had committed to keeping exports open, with Trump making his position clear on that point. Trump separately wrote on Truth Social that Europe had agreed to a large diesel release and that the process would begin immediately. Ministers are due to consider whether further diesel releases are needed in the coming days.

Macron said the G7 wanted coordinated action to lower petroleum-product prices, with diesel the priority.

The stakes are especially high for Europe. Its refineries produce about 70% of the diesel it uses, leaving imports to cover the rest. Disruption to fossil-fuel exports from the Middle East has constrained refineries there and in China, a major buyer of Gulf crude. Ukrainian attacks on Russian refineries have also helped drive Russia’s fuel output to its lowest level in 20 years. A US export ban would have intensified competition for available cargoes, threatening still higher prices in Britain and Europe.

The United States has faced its own squeeze as overseas buyers sought more fuel. Exports reached a record 1.9 million barrels a week in early August, according to the report. US distillate stocks — supplies of fuels including diesel — fell to their lowest seasonal level since 1996. Diesel pump prices exceeded $5.85 a gallon for the first time in early September. Trump raised the prospect of an export ban as those costs hit the economy ahead of November’s midterm elections.

Price relief faces a deeper supply problem

In Britain, average diesel prices reached a record £2 a litre on Friday. The impact extends beyond drivers: lorries, vans and agricultural vehicles commonly run on diesel, spreading higher fuel costs through the wider economy. Brent crude, an international oil-price benchmark, briefly fell to about $98 a barrel after news of the release, before finishing the day above $102. It had traded at roughly $72 before the Iran war.

Macquarie Group’s Walt Chancellor argued that drawing more heavily on European reserves would not fix the underlying shortage. Speaking to CNBC, he described the problem as a global energy squeeze rather than simply a diesel shortage. His assessment was that more oil needed to flow through the Strait of Hormuz and out of the Middle East; moving existing supplies around would not resolve that constraint.

The new plan follows the International Energy Agency’s agreement in March to release 400 million barrels of emergency crude, its largest government-reserve intervention. That represented a third of the group’s public stockpiles. Attention now turns to how quickly the promised diesel reaches buyers, whether ministers approve additional releases and whether the commitment to avoid export bans holds.