G7 leaders say they will coordinate the release of 100 million barrels from emergency fuel reserves through the International Energy Agency, though it is unclear how much the move will lower prices.
The release is set to begin immediately and run for four months, with a substantial amount of diesel due in the first 20 days. The group has not specified how much oil or diesel each member will provide. It plans to discuss further diesel releases in the coming days.
Oil and diesel prices have climbed amid disruptions linked to the US and Israel’s war on Iran and Russia’s war on Ukraine. Oil rose more than $4 a barrel on Thursday, while the American Automobile Association reported a record average diesel price of $6.50 a gallon last Friday, up from $5.61 a month earlier.
Hamad Hussain, a climate and commodities economist at Capital Economics, said the release could push prices down, particularly for diesel, but that the effect would likely be short-lived because it does not resolve the supply squeeze.
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