G7 Opens Fuel Reserves as Diesel Crisis Tests Transatlantic Unity
G7 Opens Fuel Reserves as Diesel Crisis Tests Transatlantic Unity
The pressure had been building for weeks. Supply disruptions linked to the war in Iran and Russia’s invasion of Ukraine drove average U.S. diesel prices to a record $6.50 a gallon late last month, while constrained shipping through the Strait of Hormuz sharpened fears of a wider energy squeeze.
On Thursday, U.S. Treasury Secretary Scott Bessent pressed European partners to move faster, saying they should make additional supplies available immediately. “America is doing its part. We look to our allies to match their commitments with action,” he said. The intervention came as Washington faced domestic political pressure over fuel costs ahead of November’s midterm elections — and as the prospect of a U.S. diesel-export ban alarmed both the energy industry and European buyers.
By Friday, the G7 had agreed to release 100 million barrels from diesel and crude reserves. The four-month programme is due to begin immediately, with a “frontloaded substantial diesel release within the first 20 days,” coordinated through the International Energy Agency. President Donald Trump had said Europe had agreed to tap its heavily stocked diesel supplies; the final plan spread the response across G7 reserves.
For Europe, the measure is relief, not insulation. The United States supplied about half of EU diesel imports in August, leaving the bloc especially exposed to any curbs on American shipments. EU trade chief Maros Sefcovic said both sides had an interest in lowering prices, but cautioned that a U.S. restriction would be unexpected and would damage Europe’s economic outlook.
Market strategists offered a blunter diagnosis: reserve releases can ease the immediate strain, but they do not solve the underlying shortage. Macquarie’s Walt Chancellor called it “a global energy problem,” arguing that the durable answer is more oil moving through the Strait of Hormuz rather than merely “shuffling deck chairs.”
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