The Group of Seven nations agreed Friday to release 100 million barrels of reserves to address surging diesel fuel prices, after the Trump administration pushed Europe to deploy their stocks.
The G7 leaders said the deployment will begin immediately and continue over four months with "a frontloaded substantial diesel release within the first 20 days" coordinated through the International Energy Agency.
"We will convene in the context of the IEA in the coming days to discuss the possibility of additional diesel releases as necessary," the G7 leaders said in a joint statement. U.S. diesel prices hit record highs in September and remain elevated Friday at $6.37 per gallon on average.
The G7 members are France, Canada, Germany, Italy, Japan, the United Kingdom and the United States. France currently holds the group's presidency. The European Union also participates in its meetings.
President Donald Trump said moments before the G7 announcement that Europe had "agreed to release a massive amount of their heavily stocked Diesel Oil." The world is facing a fuel supply crisis due to Ukraine's attacks on Russian refineries and disruptions in the Middle East from the Iran war.
The Trump administration has been pressuring Europe to release diesel stocks as an alternative to the U.S. imposing an export ban. Treasury Secretary Scott Bessent said Thursday that U.S. partners in Europe "should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions."
The G7 leaders agreed Friday to "refrain from export restrictions on energy and energy products between G7 countries and call on all producers to refrain from imposing bans that could exacerbate market tensions," according to their joint statement.
Trump is facing mounting political pressure from Republican lawmakers to tackle soaring fuel prices ahead of the midterm elections in November.
The president said last week that he was considering an export ban, a move the oil industry and broader business community in the U.S. staunchly oppose. Trump subsequently seemed to lean against an export ban due to its potential impact on gasoline prices.
EU exposure to U.S.
The prospect of the world's largest diesel exporter implementing an outright ban raised alarm across the Atlantic. The U.S. supplied around half of the EU's diesel imports in August, according to the International Energy Agency, underscoring the 27-nation bloc's exposure to a potential U.S. export ban.
EU trade chief Maros Sefcovic said he had discussed diesel supplies and soaring prices with his counterpart U.S. Trade Representative Jamieson Greer.
"We have every interest in working together on lowering the prices, be it on diesel or also other products from oil and gas supplies," Sefcovic told reporters in Milwaukee at the G20 trade ministers meeting, according to Reuters.
He added that any move from the U.S. to restrict diesel exports would be unexpected and have a negative impact on Europe's economic outlook.
'A global energy problem'
Energy strategists at Macquarie Group said Thursday that "the core issue the US faces is not a diesel problem" but a "global energy problem."
"So what is the solution then? In short, more oil through the Strait of Hormuz and out of the Middle East. Anything short of that is really just shuffling deck chairs," Macquarie Group's Walt Chancellor said in a research note.
Crude oil exports from the Persian Gulf are at or near prewar levels depending on the day, though the volumes are volatile. But fuel shipments from the region are still far below normal levels.
The Strait of Hormuz is a major throughway for the global oil trade that saw ship traffic stifled after the U.S. and Israel attacked Iran in late February. But this week it saw daily exports return to prewar levels.
— CNBC's Kevin Breuninger contributed to this report.