The G7 agreed to release 100 million barrels of diesel and crude oil from reserves over four months, front-loading a substantial diesel release into the first 20 days. The deal followed a day of crisis talks in Europe and a blunt warning from Washington that it could ban U.S. diesel exports. A joint statement from Macron's office said: “Our citizens' concerns about energy prices remain a top priority.”
The Pressure From Washington
On Friday, Oct. 2, EU countries and the European Commission met under the Commission's crisis-monitoring and coordination table for energy security. They considered a French proposal for European countries to release 50 million barrels of diesel, while members of the International Energy Agency (IEA) released 50 million barrels of crude. Two sources told Reuters about the plan. Eurostat data from May 2025 put the diesel portion at about 17% of the EU's emergency diesel and gasoil stocks, or around 3% of the bloc's annual fuel consumption.
The U.S. message was sharp. Treasury Secretary Scott Bessent wrote on X that European partners “should accelerate delivery on their existing commitments and make additional supplies immediately available.” He added: “American farmers, truckers, and businesses should not be left carrying the burden of a global diesel shortage.” Speaking anonymously, EU diplomats called the messaging “rough.” One source said Washington had demanded that France, Germany and other major European countries release 100 million barrels of diesel within 20 days. The U.S. was weighing a 90-day export ban, and President Donald Trump had floated the idea to contain domestic fuel prices before the Nov. 3 midterm elections.
Brussels pushed back. Commission spokeswoman Anna-Kaisa Itkonen said: “We fully reject any ban on diesel. A ban would not be beneficial to anyone. It would undermine our trust in the United States as a reliable partner.” EU trade chief Maros Sefcovic had warned that a ban would have “dramatic consequences for our economic performance.” Still, the bloc said it was ready to work with the IEA on a possible release. One Reuters source said EU countries discussed making any deal conditional on a U.S. commitment not to impose a unilateral export ban.
In their statement, the seven G7 countries pledged to “refrain from export restrictions on energy” among themselves and urged other producers to do the same. The group comprises Britain, Japan, Canada, Germany, France, Italy and the United States.
Prices and Public Budgets
The war in Iran, reduced refining capacity and supply disruptions have driven fuel prices higher. Seven months ago, in March, the IEA agreed to its largest-ever coordinated release: 400 million barrels, following U.S. and Israeli attacks on Iran and the closure of the Strait of Hormuz. IEA chief Fatih Birol said about two-thirds had been released. Since late September, Brent crude has traded between $97 and $102 a barrel, $25 to $30 above pre-war levels, according to Euronews. A Russian export ban, imposed after Ukraine damaged many of its refineries, and China's suspension of October fuel exports have also squeezed global diesel supply.
Italian Prime Minister Giorgia Meloni wrote to Commission President Ursula von der Leyen, asking for more room under EU fiscal rules to cushion households and businesses. She said oil prices were up almost 80% and gas as much as 156%. The agreed spending paths, she wrote, “leave limited room to alleviate the impact on households and firms without resorting to tightening measures at a time of significant downside risks for the economy.” She asked for “temporary and targeted measures” and wants the issue discussed at the finance ministers' meeting in Brussels on Oct. 9, seven days from now. Greece has made a similar request, while Italy carries one of the EU's highest debt-to-GDP ratios, behind Greece.
The Inflation Outlook
Finnish central bank chief Olli Rehn said energy prices were nearing the European Central Bank's “adverse” scenario. Inflation has climbed well past 3% and could approach 4% by year-end, twice the ECB's target, after two rate hikes this summer. Rehn said rising long-term borrowing costs would slow growth and reduce the pass-through to other prices and wages. Germany's 10-year yield stood at 3.57%, a 17-year high. He also said the euro zone economy was proving more resilient than expected.
Why This Matters: Behind the barrel counts sit household bills, haulage costs and pension payments that rise automatically with prices. Meloni's letter shows how fiscal rules written around nominal spending limits can collide with an energy shock; the Oct. 9 finance ministers' meeting will test whether the EU can adapt its framework without abandoning debt sustainability. The week also exposed Europe's dependence on decisions in Washington, while the Commission's rejection of an export ban shows why the bloc speaks with more weight when it acts together.
Reserves alone won't lower prices permanently. The G7 said it stands ready to adjust measures, and what happens next will determine whether ordinary Europeans see relief.