Oil Prices Drop After G7 Announces Strategic Reserve Release

Oil prices fell sharply on Friday after G7 members announced a coordinated release of strategic reserves through the International Energy Agency, aiming to reduce concerns about supplies.

The plan covers 100 million barrels of oil and diesel to be released over a four-month period. The announcement came after oil prices had risen sharply amid worries about the availability of energy supplies.

Brent falls below $100

Brent crude, the international benchmark, briefly dropped below $100 per barrel following the announcement before stabilising at around $102. US oil prices declined by as much as 5%.

The reserve release is intended to ease supply pressures. However, the situation differs between crude oil and refined fuels. Crude oil exports from the Middle East had been returning to near pre-war levels in recent weeks, while supplies of diesel and other fuels remained tight.

Refineries damaged during the conflict were identified as a reason for the continued pressure on fuel supplies. The supplied information does not identify the conflict or specify how the 100 million barrels will be divided between oil and diesel.

Pressure over diesel supplies

The measures followed pressure from President Donald Trump for the European Union to use its strategic diesel reserves or face a US ban on diesel exports, according to the report.

G7 members announced the reserve operation through the International Energy Agency, but the available information does not specify which individual G7 countries made or endorsed the announcement.

The market reaction saw crude prices move lower, while ongoing refinery damage continued to weigh on diesel availability. The planned release is therefore expected to address broader supply concerns over the stated four-month period, even as refined fuel supplies remain constrained.