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Oil prices fell sharply on Friday after G7 countries announced plans to release 100 million barrels of oil and diesel from strategic reserves over four months, in a coordinated effort to ease concerns over fuel supply.

The move, coordinated through the International Energy Agency, came as global energy markets continued to face pressure from disruptions linked to the conflict in the Middle East.

International benchmark Brent crude briefly dropped below $100 per barrel following the announcement before recovering to trade around $102. US crude prices fell by as much as five per cent during Friday’s trading session.

The planned reserve release is intended to increase available supplies and ease pressure on markets that have experienced a significant rise in energy prices.

The announcement followed pressure from United States President Donald Trump for European countries to make greater use of their strategic fuel reserves, particularly diesel stocks.

Trump had pushed the European Union to tap its strategic diesel reserves, warning of possible consequences for countries that failed to act, including potential restrictions on US diesel exports.

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The latest intervention comes as the global oil market faces an uneven recovery in supplies.

Crude oil exports from the Middle East have moved closer to pre-war levels in recent weeks, helping to ease some concerns over the availability of crude.

However, supplies of refined products, particularly diesel, remain tight.

Several refineries have reportedly been damaged during the conflict, limiting the ability of producers to convert crude oil into finished fuels.

The disruption has placed additional pressure on diesel markets, with governments and energy companies seeking alternative supplies to prevent shortages.

The G7 reserve release is therefore expected to focus not only on crude oil but also on refined products such as diesel.

The International Energy Agency has been coordinating emergency responses among major oil-consuming countries during previous periods of significant supply disruption.

The latest announcement represents one of the largest coordinated interventions in the market since the current crisis intensified.

The fall in oil prices following the announcement reflects expectations that additional supplies will reduce immediate shortages and ease pressure on buyers.

However, market conditions remain sensitive to developments in the Middle East, particularly the security of oil production, refinery operations and shipping routes.

Energy analysts are expected to closely monitor how quickly the strategic reserves reach international markets and whether the additional supplies are sufficient to offset continuing disruptions.

For consumers and businesses, lower crude prices could eventually reduce some fuel costs, although the impact will depend on refining capacity, transport costs, currency movements and local market conditions.

The Traffic NG
oil prices
Amarachi Ihesiulo
The Traffic NG

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