G7 to release 100 million barrels of oil to ease fuel shortages
The G7 nations have agreed to release 100 million barrels of diesel and crude oil from their strategic reserves over the next four months. This coordinated effort, announced after a video conference involving leaders from France, Germany, Italy, Japan, Canada, the United Kingdom, and the United States, aims to ease global fuel shortages and stabilize diesel supplies. The move comes as diesel prices in Australia have surged, reaching close to $3 per liter in some regions.
The fuel release will be managed through the International Energy Agency (IEA) and includes a significant allocation of diesel within the first 20 days. The G7 countries have also pledged not to impose diesel export restrictions, addressing concerns raised by U.S. President Donald Trump about potential export bans amid rising energy costs in America.
The announcement had an immediate impact on wholesale markets, with diesel prices dropping by about $US8 (approx. $A11) per barrel overnight. Australian Energy Minister Chris Bowen welcomed the agreement but cautioned that motorists should not expect immediate savings. 'I welcome the actions taken overnight by the G7 to release more fuel,' Bowen said. 'I don't think we should get ahead of ourselves, more supply puts downward pressure on prices, but I am not ready to make any predictions.'
Despite the G7 intervention, fuel markets remain volatile, particularly due to ongoing conflicts in the Middle East that disrupt shipping routes and threaten global fuel supplies. Experts warn that any renewed disruption could quickly reverse the recent gains in diesel prices. While the G7's action represents a significant step to stabilize global fuel markets, it may take several weeks before Australian motorists see any benefits at the pump.