A major fuel supply intervention is taking shape after G7 countries agreed to put up to 100 million barrels of oil from their strategic reserves on the market over four months, as soaring prices and supply disruptions continue to hit global energy markets.
The agreement was reached during a meeting chaired by French President Emmanuel Macron, with the G7 saying members and partner countries would prioritise diesel supplies in the early stages of the plan.
According to the group's statement, there will be “a frontloaded substantial diesel release within the first 20 days by G7 members and partners”.
The announcement followed remarks by United States (US) President Donald Trump, who said European countries had agreed to draw from their diesel reserves.
Trump wrote on his Truth Social account: “Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil”.
The developments come amid growing concern over higher fuel prices and interruptions to international energy supplies linked to the US-Israel war with Iran.
European officials, however, had yet to publicly confirm that a final agreement had been reached on the diesel release. EU governments were still discussing a proposal from France for a coordinated drawdown of diesel reserves.
The G7 is made up of major economies, including Germany, France, Italy and the United Kingdom, while the European Union participates as an observer.
Trump pushes Europe to use reserves
Trump has been pressing European governments to tap their diesel stockpiles as the movement of fuel and other goods through the Strait of Hormuz faces disruption.
The pressure has come as tighter global supplies contribute to higher fuel prices. At the same time, the US has been weighing possible restrictions on diesel exports.
The White House has called on European nations to use emergency diesel inventories, arguing that putting more fuel into the market could help reduce prices.
Trump had also previously suggested that the US could prohibit diesel exports if European countries failed to release their own reserves.
The European Union responded on Friday, saying it “fully rejects” the threat.
The pressure on European fuel markets has also prompted the UK government to prepare for a possible interruption of diesel exports from the US.
UK Chancellor John Healey told BBC News that British officials were engaging US authorities over the possible export ban while also assessing the country's domestic fuel reserves.
Healey said diesel prices had reached an extreme level, with supply pressures caused by the US-Israel conflict with Iran and Russia's war with Ukraine continuing to affect fuel markets.
The UK sources about one-third of its diesel imports from the US, raising concerns that restrictions on American exports could place additional pressure on the British market.
Figures from the RAC showed UK diesel prices reached a new record of 199.33 pence per litre on Monday. The price exceeded the previous high of 199.09 pence per litre recorded in June 2022.
Healey said the government's priority was to pursue a diplomatic solution to the conflict while working to reduce the burden of higher fuel costs on businesses and households.