G7 leaders agreed Friday to release up to 100 million barrels of emergency diesel and crude oil, days after Donald Trump threatened to cut off US diesel exports.
The big picture: Macron, the current G7 chair, convened a video call after a global surge in diesel prices and a US warning that Europe should tap its own stockpiles or face an export ban. The split is 50 million barrels of diesel and 50 million of crude.
- "We have all committed together to releasing these strategic reserves in the proportions I mentioned, with a focus on diesel," Macron said, adding that members also agreed to avoid export bans.
By the numbers: UK pump diesel hit a record 2 pounds a litre on Friday, putting the cost of filling an average family car at 110 pounds, about 32 more than before the Iran war, per the RAC. Brent crude traded above $100 a barrel, against roughly $72 before the war.
The backstory: US refiners exported a record 1.9 million barrels a week in early August as Middle East and Russian output fell, pushing US distillate stocks to their lowest seasonal level since 1996 and pump diesel above $5.85 a gallon in September.
- Trump posted on Truth Social that Europe had agreed to release a massive amount of its diesel and that the process would start immediately.
The other side: Macquarie's Walt Chancellor told CNBC the release treats a symptom. The core issue is a global energy problem, he said, and the real fix is more oil moving through the strait of Hormuz.
Why it matters: Diesel sets the cost of moving goods, so the drawdown reaches far past drivers into grocery and freight bills. The IEA released 400 million barrels in March and 182 million in 2022, making this its third emergency intervention.
