The G7 will release up to 100 million barrels of oil and diesel from strategic reserves over four months in a coordinated push to bring down fuel prices that have kept Brent above 100 dollars and driven European diesel to a record 2.24 euros a litre. The announcement came on Friday after French President Emmanuel Macron, holding the rotating G7 presidency, chaired talks between the United States and European members over a diesel supply squeeze traced to China’s halt on fuel exports. The release begins immediately, coordinated through the International Energy Agency, and runs through late January.
How the deal came together
The pressure had built through the week. Chinese refiners suspended October fuel exports after Beijing failed to greenlight the usual export quotas, pulling diesel supply out of the wider Asian market just as inventories ran low in Europe. China had been shipping a record volume of refined product earlier in the year, and the sudden stop stripped a marginal but real flow of barrels from a market with no obvious replacement.
The White House leaned on European capitals to release strategic stocks, and early in the week it signalled a diesel export ban as a lever if they did not act. European diesel slumped more than 8 percent on Thursday before recovering slightly, while US diesel futures fell as much as 5.6 percent after Macron said the G7 would act. Those were among the sharpest refined product moves since the Chinese suspension became public, and traders spent the week repricing the ban risk until the coordinated release gave them reason to unwind it.
“We have all committed together to releasing these strategic reserves in the proportions I mentioned, with a focus on diesel, and we are all committed to ensuring there are no export bans, and President Trump, in particular, was very clear on this point,” Macron told journalists at the Friday briefing.
The joint statement said the countries would implement commitments with a coordinated release through the IEA of 100 million barrels beginning immediately over four months. The IEA, which coordinated joint releases after crude spiked in 2022, is running the logistics again. Members including Britain, France and Japan are taking part, with the release proportional to each country’s stockpile and weighted toward diesel rather than crude.
US pressure, not US barrels
The arithmetic behind the dispute is that the United States holds the largest diesel reserves in the group while much of Europe runs lean after years of tight inventory management and refinery closures over the past decade. Washington wanted drawing to start without delay. European members initially balked, pointing to stockpiles already drawn down during earlier crises and arguing the current squeeze was driven by an Asian supply problem rather than a shortage in their own markets. Their problem, they argued, sits inside the refineries rather than the storage tanks.
There is real substance to that view. EU refineries can produce roughly 4.5 to 5 million barrels a day of diesel and gasoil at full operation, but planned autumn maintenance in northern Europe temporarily removed between 450,000 and 550,000 barrels a day of processing capacity, about 4 percent of the wider European total. Work at Motor Oil Hellas in Greece and Galp’s Sines refinery in Portugal added to the squeeze on secondary units. Russia, normally a supplier of diesel into Europe, has banned its own diesel and gasoil exports since July and extended the ban through October.
It took a threat of an American export ban, which would have stranded European buyers who depend on US diesel, to bring everyone to the table. Europe imports a meaningful share of its diesel from the United States, and a sudden restriction on those flows would have cut supply exactly when reserves were meant to stretch further. By Friday afternoon the threat was off. The Financial Times reported the US backed down from the export ban as the release plan came together. Europe got its supply path without a trade shock, and Washington got the release it had pushed for.
What it does to prices
Brent had been holding near 102 to 103 dollars through the week on the combined worries over Chinese export quotas and tight diesel. Crude slid more than 3 dollars during Friday’s session as the talks progressed and fell further after the announcement. Whether the relief holds depends on two things outside the G7’s control: how fast Chinese quotas resume, and whether OPEC and its allies add supply of their own.
The diesel market has run on a different engine than crude all year. The gap between crude and European diesel prices, the crack spread, has almost doubled since November 2025 according to pricing agency OPIS, and ECB experts estimate the refining margin now accounts for roughly 41 cents of every litre sold at the pump, close to a fifth of the retail price. The dispute in the G7 was, in effect, over who fixes that: storage tanks or refineries.
Skeptics of reserve releases have a standing argument, that they treat symptoms and must eventually be refilled, shifting demand somewhere else in the curve. That critique was made against the 2022 releases and applies again. The G7 has gone further than in 2022 by targeting diesel specifically alongside crude, an attempt to hit the refined product market where the actual shortage sits, but it does not replace refinery capacity or restore the Chinese quotas that started the trouble.
For markets, the release takes the top end off oil price risk heading into winter, assuming IEA logistics stay on schedule. Traders will watch the next drawing cadence, any sign Beijing is ready to restore export quotas, and whether Europe’s own refinery output can stretch once maintenance season passes. The root cause has not changed: China controls when the missing barrels come back, and nothing in the G7 deal forces that.