The G7 countries agreed, on Friday evening, to withdraw 100 million barrels of diesel and crude oil from emergency reserves, in a move welcomed by US President Donald Trump in light of his efforts to calm the sharp rise in fuel prices related to the war with Iran.
The conflict sparked the largest withdrawal of emergency stockpiles in history, coordinated by the International Energy Agency in March.
The G7 said in a joint statement: “Taking into account the commitments that have already been fulfilled, we will implement our commitments through a coordinated withdrawal through the International Energy Agency of 100 million barrels.”
She added that the process will begin immediately and continue for four months, with a large and early withdrawal of diesel within 20 days by the G7 countries and their partners.
The statement did not specify a distribution of the quantities of crude oil, diesel, and other products scheduled to be withdrawn, and did not mention the countries that would participate.
The statement added: “We will meet within the framework of the International Energy Agency in the coming days to discuss the possibility of conducting additional operations to withdraw (from) diesel reserves as necessary.”
Trump wrote in a post on the Truth Social platform after the decision: “Europe has just agreed to withdraw a massive amount of its huge stockpile of diesel fuel. The process will begin immediately.”
The US President seeks to reduce domestic fuel prices before the midterm elections on November 3.
Before leaving for Alabama, he told reporters at the White House that the United States would not impose a ban on diesel exports. He pointed out that this plan was not seriously proposed in the first place, even though he repeatedly stated during the past two weeks that imposing such a ban was under study and that he supported the idea.
Trump added: “Europe has a large stock of diesel, and it will make a major global contribution, and so will we. “We will not impose an export ban, but we will do what we have to do.”
In March, the Iran war led to the largest withdrawal of emergency stocks ever, as countries withdrew 400 million barrels, coordinated by the International Energy Agency.
Reuters quoted three informed sources on Thursday as saying that the Trump administration had previously informed Germany and France of the need to withdraw from emergency diesel stocks, otherwise they would face a possible US ban on its exports.
The G7 statement said that member states will refrain from imposing restrictions on exports of energy products among themselves.
Three sources familiar with the discussions of European Union governments said, according to Reuters, that the governments discussed on Friday a French proposal stipulating that European countries withdraw 50 million barrels of diesel, and that member states of the International Energy Agency withdraw 50 million barrels of crude oil.
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.
