The Group of Seven agrees to pump 100 million barrels of oil and diesel to reduce prices

US President Donald Trump said on Friday that the United States will soon fill its strategic oil reserves.

“We will very soon fill our strategic reserves, at no cost,” Trump said at a rally in Alabama.

This comes after the leaders of the Group of Seven agreed on Friday to pump up to 100 million barrels of diesel and crude oil from their reserves into the markets during the next four months, in a step praised by Trump, who announced that he would not impose a ban on the export of diesel after he had threatened it.

French President Emmanuel Macron said in a statement following talks he chaired to coordinate action on fuel prices, that the group’s countries agreed to “a coordinated offering, through the International Energy Agency, of a total of 100 million barrels, to be implemented immediately and over a period of four months.”

A German economist said that the G7 decision to release oil and diesel reserves may provide motorists only short-term relief from rising fuel prices.

Samina Sultan of the German Economic Institute said, according to the German News Agency: “(The decision) could mitigate the impact for a period of time, but the basic problem still exists.”

She added that the impact on motorists will also depend on the amount of diesel that will be released, something that was not specified in the G7 statement.

The turmoil in the Strait of Hormuz has restricted crude oil exports and isolated important refineries from the global market.

On Friday, the G7 countries agreed to release 100 million barrels of crude oil and diesel from emergency reserves over a period of 4 months, amid rising fuel prices. This step comes within the framework of a measure coordinated by the International Energy Agency.

The G7 also confirmed that it would discuss the potential release of larger quantities of diesel fuel.

Sultan said that returning energy prices to normal permanently would require reopening the Strait of Hormuz.

Oil tankers have again come under fire there in recent days, according to the British Maritime Trade Operations Authority.

Sultan added: “If at the same time we witness further escalation in the Strait of Hormuz... and nothing can be crossed, the reserves will be just a drop in the ocean.”

The US government had previously called on Europe to put more diesel fuel on the market, and also considered restricting diesel exports.

But the G7 statement explicitly said that its members would refrain from imposing such restrictions.

Crude oil futures fell at settlement on Friday, the last trading of the week, after European leaders agreed to US President Donald Trump’s request to withdraw quantities of their diesel reserves with the aim of lowering prices and reducing the need to import fuel from the United States.

Brent crude fell 6 cents, or 0.06 percent, to record $102.25 per barrel at settlement. US West Texas Intermediate crude fell at settlement by $1.76, or 1.90 percent, to $91.11 per barrel.

Brent crude ended the week up 0.11 percent, while West Texas Intermediate crude fell 1.6 percent.

The US Trade Representative's Office said that "a small number" of G20 trade ministers rejected US calls to limit excess industrial production capacity and "non-market-based" policies, revealing divisions within the group that includes the world's largest economies.

The United States, which holds the rotating presidency of the G20 this year, issued this statement a day after a trade meeting in Milwaukee showed that only two countries, Mexico and Argentina, had joined a Washington-led statement calling for greater efforts and cooperation to exclude goods produced with forced labor from supply chains.

The rejection of the vast majority of G20 countries comes after the administration of US President Donald Trump imposed customs duties of 10 percent or 12.5 percent on goods imported from 59 countries and the European Union, claiming that it does not adequately implement the ban on forced labor.

The office's statement did not name the countries that objected to the statement of surplus production capacity. But China objected to a similar statement from the G20 denouncing forced labor and economic policies not based on market mechanisms that lead to surplus exports, during a meeting of finance ministers a month ago in North Carolina.

The statement said: “The draft ministerial statement received the support of all members except for a few of them, as some of them categorically rejected the establishment of this path towards cooperative action” on surplus production capacity, adding that this made the US presidency of the G20 “extremely disappointed.”

The issue of surplus industrial production capacity in China and government support for industry was one of the most prominent topics in the G20 ministerial meetings led by the United States this year. Beijing rejects accusations that its industrial policies have led to a surplus in production capacity, accusing Western countries of using this issue to justify trade protectionist measures.

The United States said that the G20 trade ministers reached a consensus on condemning the use of food trade as a weapon, with members agreeing not to use the trade in food or agricultural production inputs as a tool for economic or political coercion.

In the G20 joint statement, the ministers defined the use of food as a weapon as taking measures aimed at “slowing, stopping, obstructing or directing the flows of food and agricultural production requirements” for the purpose of exerting coercive pressure to extract geopolitical concessions that are not related to the issue.

The G20 trade ministers said: “We denounce the use of food as a weapon, because it constitutes a major humanitarian and economic threat.”

After pressure from Trump, which included the threat of imposing a US ban on diesel exports, the G7 countries agreed on Friday to withdraw approximately 100 million barrels of diesel reserves in an attempt to reduce its prices in the United States, which have reached record high levels. Diesel is widely used in agricultural production.