The G7 has agreed to release 100 million barrels of diesel and oil from emergency reserves to address a worsening global supply crisis.
The club of wealthy democracies confirmed on Friday it would work alongside the International Energy Agency to ramp up releases from emergency stockpiles in response to “ongoing market pressures.”
Senior politicians from G7 nations joined a video call to address a growing diplomatic rift between the United States and Europe over diesel supply commitments.
America, the world’s largest diesel producer, had threatened to curb or ban its exports unless Europe tapped into its reserves and relieved pressure on the supply-starved global market.
Donald Trump posted on social media that Europe had agreed to “release a massive amount of their heavily heavily stocked Diesel Oil,” adding that the process would “begin immediately.”
Diesel prices have passed 200p a litre in Britain for the first time ever, as the fuel became a major tool in conflicts across the Middle East and Eastern Europe.
Iran and Ukraine have both been targeting refineries in moves designed to hamper global refining capacity and intensify strain on the international energy market.
Foreign secretary Ed Miliband represented the UK on the call, joined by senior leaders from every other G7 nation, following a bilateral discussion between Donald Trump and Emmanuel Macron.
The French president had proposed releasing some 100 million barrels of both diesel and crude oil to head off the US administration’s threat of an export ban.
In a statement after the call, G7 leaders said they had “agreed on decisive, coordinated measures to stabilise immediate energy supplies, shield households and businesses from price shocks, and strengthen the long-term resilience of global energy systems.”
The statement confirmed members would implement “a coordinated release through the IEA of 100m barrels to begin immediately over four months, including a frontloaded substantial diesel release within the first 20 days.”
As part of Friday’s commitment, members also agreed to “refrain from export restrictions on energy and energy products between G7 countries,” suggesting the US export ban threat has now been withdrawn.
The agreement ends a fraught period for US-Europe relations, during which the US accused Europe of dragging its feet over a March commitment to leverage its energy stockpiles.
On Thursday, Scott Bessent urged European partners to use their reserves “immediately,” writing on social media that they should “accelerate delivery on their existing commitments and make additional supplies immediately available.”
Economists had warned the UK was especially vulnerable to US export curbs, with Capital Economics cautioning that a full ban could have pushed pump prices beyond 300p a litre.
The firm cited the UK’s small reserves and low domestic refining capacity as key risk factors distinguishing Britain from larger European partners such as France and Germany.
Unlike France and Germany, which both hold up to 400 days’ worth of diesel in storage, the UK only has enough capacity for between 40 and 50 days.
Capital Economics chief UK economist Paul Dales said the UK is “reasonably reliant on imports of diesel and particularly imports from the US,” warning that a prolonged ban would feed directly into inflation.
Dales added that any ban lasting over 60 days could “raise the chances of second-round inflation effects and could mean the Bank of England raises interest rates further and for longer than otherwise.”
Friday’s deal has, for now, removed that immediate threat, though questions remain over the precise breakdown of diesel versus crude oil within the agreed 100 million barrel release.