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The Group of Seven, an international organization of leading democracies, agreed to release 100 million barrels of diesel and crude oil from emergency reserves to cool surging fuel prices.
Counter play
The announcement comes after President Donald Trump pushed European countries to tap into their stockpiles to increase supply and help lower prices at US pumps.
Last week, Trump explicitly warned that they would face a US diesel export ban if they refused.
Shortly following the agreement, Trump said the export ban was off the table.
How long will it take to hit? The release will be spread over four months, with most of the diesel expected to hit the market in the first 20 days.
Gas ain’t cheap
Diesel is crucial for trucking, farming, and heavy industry, which each pass higher fuel costs down through the prices of food, goods, and services.
Lately, record prices have been hitting all three. Since the Iran war began in late February:
The national average for diesel has surged roughly 70%.
Last month, diesel hit a record $6.50 per gallon before dipping slightly.
That adds up: Brown University found in September that the rise in fuel prices has cost Americans over $100 billion, with each US household having to absorb roughly $763.
/ Why is this important? The development could lower fuel prices in the short term, especially for truckers and farmers, which could also eventually ease pressure on groceries, deliveries, and other everyday goods.
However, the benefit may be limited if continued supply disruptions in the Middle East keep oil above $100 a barrel.
