G7 Nations Release 100 Million Barrels of Oil to Address Diesel Shortage

The G7 nations have agreed to release 100 million barrels of oil over four months, with a focus on diesel reserves during the first 20 days.

This move is aimed at addressing the current supply pressure in the market, particularly for diesel. U.S. diesel retail prices hit $6.50 a gallon in late September, making it difficult for farmers and truck drivers to operate.

According to the IEA Executive Director Birol, this release is a direct response to diesel supply pressure. However, he noted that the diesel market remains tighter than the crude oil market.

The global refining system has an operating gap of about 4 million to 5 million barrels per day, with the Middle East and Russia accounting for half of it. The global seaborne diesel market is about 8 million barrels per day, leaving a nearly 19% supply gap.