Key takeaways
G7 leaders agreed on Friday to release 100 million barrels of diesel and crude from strategic reserves over four months, with a large diesel tranche within 20 days, after US President Donald Trump dropped his threatened ban on American diesel exports. The move comes as Pakistan raised petrol to Rs392.76 a litre for the second time in two days.
The world’s richest economies moved on Friday to calm a growing fuel-price crisis, agreeing to push 100 million barrels of diesel and crude oil from strategic stockpiles into the market over the next four months. The G7 decision, reached at an emergency videoconference convened by French President Emmanuel Macron, came alongside a climbdown by US President Donald Trump, who withdrew his threat to halt American diesel exports. For Pakistan, the news arrives just as petrol prices were raised for the second time in two days — and raises the question of whether any of this relief could ever reach the pump.
What the G7 actually agreed
The seven leaders — of the United States, France, Italy, Germany, Japan, Britain and Canada — issued a joint statement on Friday announcing “coordinated release through the International Energy Agency of 100 million barrels to begin immediately over four months.” A large tranche of diesel is to land within the first 20 days, the statement said, which also left open the possibility of further releases if needed. The volume is roughly equivalent to one day of global oil demand.
Macron, whose country holds the rotating G7 presidency, convened the emergency videoconference after speaking with Trump about diesel prices the previous day. Coming out of the talks, he announced the export-ban threat was off: “We have agreed that there will be no ban or restrictions on exports between G7 members,” he said. “President Trump was very clear on this point.”
Trump wrote on his Truth Social platform: “Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil.” Macron said he expected the release to push fuel prices down at the pump as quickly as possible.
Why diesel has become the crisis fuel
Diesel and related fuels make up roughly 28 per cent of the world’s oil demand, according to the International Energy Agency — and they have been in especially short supply this year. Military strikes on energy infrastructure in the Middle East and on Russian refineries have knocked out refining capacity, cutting the world’s ability to turn crude oil into the fuels people actually burn.
In the United States, retail diesel hit a record $6.53 a gallon, heaping pressure on Trump and the Republicans ahead of the midterm elections on November 3. In Europe, diesel averaged a record €2.24 a litre, according to European Commission data. Refined-product flows from the Persian Gulf have fallen 75 per cent since the end of February; Russia has exported no diesel since July, forcing buyers such as Brazil and Turkey to compete with Europe for replacement barrels; and China has reportedly suspended fuel exports for October, according to sources cited by Bloomberg.
Europe is especially exposed: it imports about 1.5 million barrels of diesel a day, around a third from the United States, according to market data firm S&P Global — a dependence that grew after Europe banned Russian imports following the 2022 invasion of Ukraine. Small wonder European capitals resisted both the export-ban idea and dipping into their own reserves: Robert McNally of the Rapidan Energy Group said Europe had been hoarding stocks for fear of a prolonged disruption.
Trump’s export-ban threat — and why it was dropped
The G7 meeting grew out of days of pressure from Washington. The Trump administration had floated banning US diesel exports unless Europe released more of its own reserves — a threat opposed by American oil companies and European leaders alike. On Thursday, Treasury Secretary Scott Bessent urged US partners on X to speed up delivery on existing commitments, adding that America was doing its part: the US provided nearly half of the 400-million-barrel release that IEA members pledged in March, in the early days of the Middle East war, while Germany — the EU’s largest contributor — has supplied less than a quarter of the 19.5 million barrels associated with it, and France has barely drawn on anything, according to an industry insider.
A US export ban would have hit Europe at the worst moment; on Friday a European Commission spokesperson warned it would undermine Europe’s trust in the United States as a reliable partner. The G7 compromise gave both sides something: Europe keeps access to American diesel, and Washington gets the coordinated release it demanded. One caveat, noted by the research firm Clearview: export curbs on destinations outside the G7 still cannot be wholly ruled out.
Pakistan: petrol raised twice in two days
While the G7 was negotiating, Pakistan’s fuel-price treadmill kept turning. The federal government raised petrol by Rs2.10 per litre and high-speed diesel by 30 paise for three days, effective October 3 to 5, the Petroleum Division announced. Petrol now costs Rs392.76 a litre, up from Rs390.66; diesel is Rs399.64, up from Rs399.34. The division cited changes in Platts rates, premiums and incidentals.
The revision followed a sharper Thursday move: petrol up Rs3.26 to Rs390.66, diesel down Rs1.01 to Rs399.34 — meaning petrol has climbed Rs5.36 a litre in two days. This is the new daily pricing mechanism at work: OGRA now sets prices from a seven-day rolling average of international oil prices and import costs, so domestic rates respond faster to global moves. The latest calculations put the petrol reference price at $129.01 a barrel and diesel at $110.11, according to Business Recorder. Heavy levies sit on top: taxes and duties are reported at around Rs114 per litre on petrol and Rs100 on diesel.
Analysis: could the G7 move lower Pakistan’s fuel prices?
Markets reacted within hours: on Friday, Brent crude fell about 3 per cent to around $99 a barrel, US crude dropped nearly $4 to $88.92, and European diesel futures slid 4.3 per cent to $1,386.75 a metric ton. Investors took the G7 announcement as a sign the worst of the diesel squeeze may be easing.
Whether that reaches Pakistani pumps is slower and murkier. Because OGRA prices off a seven-day rolling average, one day’s global dip does not become an immediate domestic cut — it feeds into the average gradually. The front-loaded diesel release, due within 20 days, could in principle soften diesel increases in the coming weeks, if the barrels actually flow.
But two big caveats apply. First, the tax wedge: with roughly Rs114 a litre in levies on petrol, international falls never pass through one-for-one. Second, reserves are a one-shot tool. As energy adviser Olivier Appert of the French Institute of International Relations cautioned, released stocks cannot be mobilised again, and only fixing the underlying crisis — refinery outages and disrupted supply routes — would bring lasting relief.
The honest answer: the G7 move improves the odds of short-term stabilisation, especially for diesel, but a durable fall in Pakistani pump prices needs damaged refineries back online and supply routes reopened — things no statement can promise.
What happens next
The IEA will now coordinate the release, with “additional” tranches possible if needed. The test is delivery: Washington’s long-running complaint is that European reserve pledges have been honoured slowly and partially — this time the barrels must flow within 20 days. For Pakistan, the proof will be in OGRA’s daily revisions: the first real-world check on whether the global easing is feeding into the seven-day average. And with US midterms on November 3 giving Trump every incentive to keep pressing for lower prices, fuel markets will stay front and centre.
This is a developing story. Updates will follow as the IEA release proceeds and OGRA’s pricing revisions reflect the change.
Sources
- “G7 to release 100 million barrels of diesel and other reserves as prices soar” — The Business Times, Oct 2, 2026
- “Under pressure from Donald Trump, G7 releases 100 million barrels of oil” — Le Monde, Oct 3, 2026
- “EU rejects Trump’s diesel export ban” — USA Today, Oct 2, 2026
- G7 joint statement, Oct 2, 2026 (issued via the Élysée; full text reported by Business Times, Le Monde and USA Today)
- “Govt raises petrol, diesel prices for three days” — Aaj English TV, Oct 3, 2026
- “Petrol Price Rises to Rs390.66, Diesel Falls to Rs399.34” — Bloom Pakistan, Oct 2, 2026
- Petroleum Division price notifications, Oct 2 and Oct 3, 2026 (via Aaj English TV and Bloom Pakistan)
