The Group of Seven countries has agreed to release 100 billion barrels of crude oil and diesel from emergency reserves over several months in an effort to reduce soaring energy prices after pressure from US President Donald Trump.
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countries → agree → Trump
The US and Israel’s war on Iran, as well as Russia’s war on Ukraine, have triggered a spike in global oil and diesel prices.
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war → trigger → prices
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Europe → track → reserves
- list 3 of 3G7 nations bow to US pressure and avoid crippling diesel ban
Oil prices jumped on Thursday and settled up more than $4 a barrel.
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prices → bow → Thursday
Global diesel prices also hit a record high last Friday with the average price for a gallon (3.79 litres) of diesel at $6.50, up from $5.61 a month earlier, according to the American Automobile Association (AAA).
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prices → hit → Association
In a statement on Thursday, G7, which includes the US, UK, Canada, Japan, Germany, Italy and France, with the EU also represented, said there will also be a “substantial diesel release within the first 20 days” and discussions over “additional diesel releases as necessary” will be held in the coming days.
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discussions → include → days
Will the G7’s energy release stabilise the global energy market?
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release → stabilise → market
Here’s what we know:
What has the G7 announced?
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G7 → ’ → What
After a video conference of G7 leaders chaired by French President Emmanuel Macron on Friday, the group said in a joint statement: “Taking into account commitments that have already been fulfilled, we will implement our commitments with a coordinated release through the IEA of 100 million barrels.”
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we → chair → barrels
Earlier this week, the International Energy Agency’s (IEA) Executive Director Fatih Birol said that members had released about two-thirds of the 400-million-barrel agreement.
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members → say → agreement
The G7 energy release will begin immediately and last for four months and will include a substantial diesel release for 20 days.
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release → begin → days
It is not clear how many oil and diesel stocks each member of the group will release.
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member → release → group
“We will convene in the context of the IEA in the coming days to discuss the possibility of additional diesel releases as necessary,” the statement said.
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statement → convene → releases
“We will coordinate maintenance schedules across G7 refineries to prevent simultaneous capacity shutdowns and temporarily increase utilization rates where feasible,” it added.
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it → coordinate → rates
The G7 also urged member countries to refrain from imposing export restrictions on energy products among themselves.
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G7 → urge → themselves
Earlier this week, the Trump administration had threatened to impose a ban on US diesel exports and also pressured Europe to release its emergency diesel stocks to help ease soaring diesel prices.
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administration → threaten → prices
Global energy prices have been soaring due to the US and Israel’s war on Iran, which has all but halted energy exports from the Gulf.
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which → soar → Gulf
Meanwhile, the Russia-Ukraine war has also disrupted energy supplies.
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war → disrupt → supplies
Former head of the International Energy Agency’s Oil Industry and Markets Division Neil Atkinson told Al Jazeera that there are three key factors contributing to the decline in global diesel supply.
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head → tell → supply
First, “there isn’t diesel coming out of the Middle East to Europe, and Europe took quite a lot of diesel from Saudi Arabia and from Kuwait.”
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Europe → be → Kuwait
Second, “Russia has now ceased to export diesel at all” due to “the attacks by Ukraine on Russian refineries”.
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Russia → cease → refineries
“And China is no longer exporting diesel,” he added.
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he → export → diesel
“We’re in a situation where demand remains relatively high and is likely to stay high because of the agricultural harvesting season.”
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demand → ’re → season
According to data from JODI and the Organization of Petroleum Exporting Countries (OPEC), The United States is the world’s largest producer and exporter of diesel.
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States → accord → diesel
It produces around 240.5 million tons and exports around 1.26 million barrels of diesel per day.
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It → produce → day
Saudi Arabia is the world’s second largest producer of diesel producing 58.4 million tons, while Russia is the world’s second largest exporter of diesel, exporting 783.4 thousand barrels per day.
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Russia → produce → day
Will the G7 energy release bring prices down?
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release → bring → prices
After the G7 announcement, French President Macron who had co-chaired the meeting said the group’s move to release barrels of oil and diesel, will “bring down the prices of petroleum products, particularly diesel.”
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move → co → products
The price of Brent crude oil, the international benchmark, briefly dropped below $100 a barrel after the G7 announcement, but rose to around $102 in the evening.
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price → drop → evening
Naeem Aslam, Chief investment Officer at Zaye Capital Markets told Al Jazeera that the G7 energy release was “very much needed” but the group’s announcement was just to ease off the pressure on the energy market.
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announcement → tell → market
“The actual structure changes about who is going to release [the energy stocks] and what and where the bans will be lifted, remains an important component in terms of the market,” he said.
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he → go → market
“So what we are expecting on Sunday night especially as the markets open, we will see energy prices to see some sort of added pressure coming off.
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sort → expect → pressure
But going into Monday morning…we could potentially see the reversal in the market,” he added.
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he → go → market
Atkinson said the G7’s fuel release is welcome but “doesn’t deal with the fundamental problem that the global supply remains lower than normal”.
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supply → say → problem
Atkinson told Al Jazeera that “seven months after this war started in the Middle East, we are still in a situation where the global supply of crude oil or products remains significantly below pre-war levels.”
“We are now in a situation where the focus is on end use of products, mainly diesel, which is what we’re talking about here,” he added.
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he → tell → what
What has Trump said?
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Trump → say → What
Soaring diesel prices have been a source of tension for the Trump administration and Republicans who fear this will cost them votes in the upcoming November midterm elections.
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this → soar → elections
Last week, Trump pressured Ukraine to stop attacking Russian diesel facilities amid the war, which Russia started when it invaded Ukraine in February 2022.
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it → pressure → February
Then, on Thursday this week, the US president told reporters that his administration “may” ask European countries to release diesel stocks, shortly after Treasury Secretary Scott Bessent urged Europe to “immediately” tap its reserves.
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Bessent → tell → reserves
Trump also threatened to impose a ban on US diesel exports if Europe did not release emergency diesel stocks.
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Europe → threaten → stocks
…and 17 more, not listed.
The Aporia
