G7 Unveils Reserves: 100 Million Barrels of Oil and Fuel to Be Released into the Market 0 148

This is stated in a joint statement by the G7 leaders, published on October 2 following a video conference dedicated to the situation in the energy market, Reuters reports.

The release of reserves is set to begin immediately and last for four months. In the first 20 days, the G7 countries and their partners intend to provide a significant additional volume specifically of diesel fuel.

The exact ratio between diesel and crude oil in the final plan has not yet been specified.

Earlier, France proposed that European countries release 50 million barrels of diesel, while the member states of the IEA were to add another 50 million barrels of crude oil. However, the final G7 statement is broader: it refers to a total volume of 100 million barrels, with a priority for diesel to enter the market in the first 20 days.

At the same time, the G7 countries agreed to coordinate the maintenance schedules of oil refineries to avoid simultaneous shutdowns of significant capacities. Where possible, refinery loads are expected to be temporarily increased.

The G7 also urged countries with large refining capacities to ramp up the production of petroleum products, primarily diesel fuel.

Another important decision concerns possible export restrictions. The G7 countries committed to not impose restrictions on the trade of energy resources and petroleum products among themselves and called on other producers to refrain from bans that could further destabilize the market.

Thus, the previously discussed threat of limiting American diesel exports effectively received a political response: G7 participants agreed to keep energy resource trade among partners open.

The IEA has been tasked with monitoring the implementation of agreements and the impact of the reserve release on the market. Within 20 days, the agency is to prepare a report assessing the situation and providing recommendations. If necessary, countries are ready to consider additional releases of diesel reserves.

The market reacted almost immediately. According to the Financial Times, European diesel futures fell by about 8% to $1,337.75 per ton after the announcement, the lowest level since early September. American wholesale diesel prices also declined.

The G7 decision comes amid sharp tensions in the global petroleum products market and rising fuel costs. Now the authorities' task is to quickly increase diesel supply and prevent further price spikes.

For Latvia, this is primarily potentially good news in terms of prices: the country is part of the overall European fuel market, so a decrease in wholesale quotes over time may reduce pressure on diesel prices at Latvian gas stations. However, this does not mean that retail prices will drop immediately: they also depend on procurement contracts, taxes, logistics, and seller markups.