G7 Countries Agree to Release Oil Reserves Amid Soaring Energy Prices
The Group of Seven (G7) countries have agreed to release 100 million barrels of crude oil and diesel from emergency reserves over several months in an effort to reduce soaring energy prices. The decision was made after pressure from United States President Donald Trump, who threatened to impose a ban on US diesel exports if Europe did not release its emergency diesel stocks.
Global energy prices have been rising due to the US and Israel's war on Iran, as well as Russia's war on Ukraine. The average price for a gallon of diesel has hit a record high of $6.50, up from $5.61 a month earlier. The G7's move is expected to put downward pressure on prices, particularly global diesel prices.
However, experts warn that the impact will be short-lived given that this is just a temporary solution to the supply crunch. 'The actual structure changes about who is going to release [the energy stocks] and what and where the bans will be lifted, remains an important component in terms of the market,' said Naeem Aslam, chief investment officer at Zaye Capital Markets.
The G7's decision comes after a video conference of leaders chaired by French President Emmanuel Macron. The group announced that it will coordinate maintenance schedules across G7 refineries to prevent simultaneous capacity shutdowns and temporarily increase utilization rates where feasible.