The G7 releases 100 million barrels of strategic oil under American pressure

A drop of oil is worth a drop of blood. (Georges Clemenceau, 1917)

Clemenceau did not think he was saying that well. In December 1917, the Tiger asked Washington for tankers so as not to lose the war. One hundred and nine years later, the roles have been reversed, and it is America which is pushing Europe to open up its oil reserves.

Friday October 2, mid-afternoon. Emmanuel Macron comes out of a G7 videoconference and releases the figure that the trading rooms have been watching for since the morning. Up to 100 million barrels of diesel and crude oil will leave the G7's strategic stocks in four months.

Traders did not wait for the press conference. Prices have been sliding since the first leaks of the day. As a result, Brent fell back below 100 dollars. It was shattered on September 9 with the Houthi strikes on Saudi Arabia. The diesel stalled even harder.

Oil reserves, 100 million barrels to put out the fire

“We decided to release strategic stocks of diesel and crude oil under the coordination of the International Energy Agency,” declared the head of state, quoted by the JDD. The schedule is tight. Substantial samples are expected to take place over the next 20 days. Furthermore, members undertake not to restrict their exports of petroleum products among themselves.

The mechanics come from Paris. The French proposal provided for 50 million barrels of diesel drawn from European reserves. In addition, 50 million barrels of crude oil were brought by the IEA countries, or up to 100 million barrels in total. The final breakdown remains to be clarified.

The G7 says it is ready to put diesel back into the mix if the market demands it. These barrels are primarily used to meet the commitments made in March. This coordinated operation of 400 million barrels is still only partially executed. As Oilprice points out, nothing guarantees 100 million new barrels.

Trump forced Europe to open up its oil reserves

Behind European generosity, there is a gun on the table. Washington threatened to ban exports of American diesel to the Old Continent. However, the United States supplied around half of the diesel imported by the EU in August.

Treasury Secretary Scott Bessent set the scene bluntly. American farmers and truckers “should not shoulder the burden of a global diesel shortage alone,” he said. A gallon of diesel was priced at $6.37 on average at the American pump on Friday, compared to $3.70 a year earlier.

Brussels, however, tried to resist. The European Commission judged that an export ban would undermine confidence in America as a reliable partner, and Berlin was dragging its feet. Donald Trump welcomed the fact that Europe is starting to release “a massive quantity” of diesel.

On September 22 at Trump Tower, Emmanuel Macron played other cards. He first proposed a UN resolution to reopen the Strait of Hormuz. He also called for securing the Saudi port of Yanbu and the East-West oil pipeline targeted by the Houthis. Finally, he called for a moratorium on energy strikes in Ukraine. Only clearance is arriving on the plate today.

Oil futures falling, Bitcoin looks elsewhere

The sanction was immediate on futures contracts (futures, which today set the price of a barrel delivered in several weeks). During the session on Friday, WTI for November fell by around 4% towards 89 dollars. At the same time, December Brent fell back below 100 dollars. European diesel lost more than 4%. The relief did not last the entire session. After a low of $98.40 around 4 p.m., Brent rose above $101 in the evening.

The most telling signal is hidden in the gap between diesel and crude. This refining margin fell from $76.77 to around $69 per barrel, according to Oilprice. A real relief. The site points out, however, that the diesel shortage still depends on the restart of damaged or shut down refineries.

On the crypto side, Bitcoin did not wait for the G7 to breathe. The queen of cryptos was trading around $86,200 at the start of the afternoon (+2.9% over 24 hours). Liquidations of short positions and the easing of bond yields supported it. Cheaper oil remains good news for it. Indeed, each dollar withdrawn per barrel loosens a little the grip of inflation that weighs on the Fed.