G7 intervenes in the diesel market: 100 million barrels from reserves

The G7 countries will release up to 100 million barrels of oil and diesel from their strategic stocks. With this, the largest Western economies want to bring down the sharp rise in fuel prices. The measure follows strong pressure from Donald Trump's US administration.

The release is coordinated by the International Energy Agency (IEA) and will take place over the next four months. French President Emmanuel Macron, currently chairman of the G7, announced the decision on Friday.

The measure explicitly focuses on diesel. Disturbances in the energy market have put pressure on the availability of diesel, while Europe is heavily dependent on imports to fill the shortage of its own production.

According to Macron, the G7 wants to cause a drop in fuel prices with the additional stocks. The countries have agreed to make strategic reserves available, with diesel playing an important role.

The market reacted immediately. The price difference between diesel and crude oil, an important indicator of the tightness in the diesel market, fell sharply after traders started to take into account the additional supply.

The decision follows pressure from Washington. The US government had suggested the possibility of restricting the export of diesel if European countries did not draw on their own emergency stocks more quickly.

Such an export restriction could hit Europe hard. The continent imports large quantities of diesel because its own refineries do not produce enough to meet demand.

Macron said that in addition to releasing the reserves, the G7 countries have spoken out against export bans. According to him, Trump was clear about that during the talks.

"We have all committed ourselves together to releasing these strategic reserves, with a focus on diesel, and to preventing export bans," Macron said.

Trump welcomed the decision on social media on Friday. According to him, Europe has agreed to release a large amount of diesel from the well-stocked strategic stocks and that process starts immediately.

This is not the first time this year that countries have used their strategic oil stocks. Shortly after the outbreak of war with Iran, the IEA already coordinated a plan in March to make 400 million barrels available.

Trump then criticized European countries because, according to him, the agreed stocks did not reach the market quickly enough.

The new measure of up to 100 million barrels should now provide additional supply in the next four months. In particular, the development of the diesel price is becoming important, as higher fuel costs can have an impact on transport, production and ultimately inflation.