G7 Strikes Emergency Deal to Flood Market With 100 Million Barrels After Trump’s Diesel Ultimatum

The world’s richest democracies scrambled into crisis mode on Friday, agreeing to release up to 100 million barrels of oil and diesel from their emergency reserves after President Donald Trump threatened to cut off American fuel exports and plunge Europe deeper into an energy squeeze that had already pushed British pump prices past the symbolic £2-a-litre mark.

The agreement, hammered out on a video call chaired by French President Emmanuel Macron, defused a brewing transatlantic row that had pitted Washington against its closest allies at the worst possible moment: with diesel prices at record highs, war still rattling Middle Eastern oil infrastructure, and Russian refineries under sustained Ukrainian drone attack.

Under the deal, G7 members — the US, UK, Canada, Japan, Germany, Italy and France, alongside the EU — will coordinate a drawdown of roughly 50 million barrels of crude oil and 50 million barrels of diesel through the International Energy Agency over the next four months. Crucially, officials promised a “frontloaded substantial diesel release” within just 20 days, an acknowledgment that the fuel crunch is doing the most immediate damage to consumers and businesses.

Just as significant as the barrels themselves was what the G7 agreed to stop doing: in a joint statement, leaders pledged to “refrain from export restrictions on energy and energy products” against one another — language clearly aimed at neutralising Trump’s threat to ban US diesel exports outright.

Macron said the American president had been unambiguous on that point. “We are all committed to ensuring there are no export bans, and President Trump, in particular, was very clear on this point,” he told reporters after the call. Trump, for his part, declared victory on social media, writing that Europe had “agreed to release a massive amount of their heavily stocked Diesel Oil” and that the process would “begin immediately.”

The standoff had been building for days. The US is the world’s dominant diesel exporter, refining four to five million barrels a day while consuming only about 3.6 million domestically — leaving over a million barrels a day destined for overseas buyers, many of them in Europe. But that export flow had drained America’s own stockpiles to their lowest seasonal level since 1996, sending US pump prices surging past $5.85 a gallon and creating a political headache for Trump ahead of November’s midterm elections.

Treasury Secretary Scott Bessent argued American truckers, farmers and businesses “should not be left carrying the burden” of propping up global supply, and pressed Europe to release its own stockpiles rather than lean indefinitely on US exports. The implicit threat, should Europe fail to act, was a ban that would have starved allies of fuel they badly needed.

For Britain in particular, the stakes could hardly have been higher. More than half the UK’s diesel is imported, with roughly 31% of that coming from the US — far more exposure than France or Germany, which each hold up to 400 days’ worth of diesel in storage. The UK’s own reserves cover only 40 to 50 days. Capital Economics warned this week that a full US export ban could have driven UK pump prices beyond 300p a litre, with chief UK economist Paul Dales cautioning that prolonged disruption would risk feeding into broader inflation and potentially force the Bank of England to keep interest rates higher for longer.

Those fears were already materialising before the G7 deal was struck. The RAC motoring group said the cost of filling an average family car in the UK had hit £110 — nearly £32 more than before the war between Israel, the US and Iran upended Middle Eastern oil flows. Foreign Secretary Ed Miliband represented Britain on Friday’s call, saying the measures agreed would “stabilise energy supplies, build resilience in supply chains and shield households and businesses from price shocks.”

The broader supply picture explains why prices have spiralled so dramatically. Conflict in the Middle East has curtailed both crude extraction and refining capacity across the region, while Russia — hit by a wave of Ukrainian strikes on its refineries — has imposed its own diesel export ban, pushing its fuel output to 20-year lows. China, a major buyer of Gulf crude, has further tightened the global market. Diesel is notoriously difficult to refine compared with petrol, and because it underpins haulage and agriculture, demand is almost impossible to throttle back without hitting food and freight costs directly.

Markets registered cautious relief at the announcement. Brent crude, the global benchmark, briefly dipped below $100 a barrel before settling around $102 — still a long way above the roughly $73 it fetched before the US and Israel struck Iran, but a step back from the peak of the panic.

Beyond the immediate release, G7 leaders said they would coordinate refinery maintenance schedules to avoid multiple plants going offline simultaneously, and would encourage nations with spare refining capacity to prioritise diesel production. They also reaffirmed that sanctions on Russia over its war in Ukraine would remain firmly in place, even as the bloc leans on global supply elsewhere to ease the squeeze.

What remains unclear is exactly how the burden will be shared — which countries will release how much, and on what timetable. Macron indicated ministers would reconvene in the coming days to weigh “additional diesel releases as necessary” if the initial tranche fails to calm markets. For now, the message from the G7 was one of unity restored after a tense few days in which the prospect of Washington turning off the taps had exposed just how fragile the West’s energy security truly is — and how costly a transatlantic trade spat over barrels of fuel could become for ordinary households filling up at the pump.