JPMorgan: G7 Emergency Release Targets Diesel, but Much of the Headline Volume Appears Previously Committed

Record diesel prices have intensified pressure on governments to intervene, while wide transatlantic arbitrage has drawn more US diesel into Europe. US shipments to Europe rose from roughly 200-250kbd before the war to around 400kbd in July and nearly 500kbd in August, tightening US inventories while helping slow inventory declines in Europe. The G7 has agreed to release 100 million barrels of crude and diesel over four months, with a large share of the diesel release frontloaded into the first 20 days and a pledge to avoid energy export restrictions. However, the headline 100 million barrels likely includes a significant amount of previously committed IEA supply rather than representing entirely new intervention. Around 321 million barrels of the 412 million pledged in March have already been released, leaving roughly 91 million barrels outstanding, including much of the remaining US SPR commitment. The key unresolved details are the crude-versus-diesel split and country contributions, with earlier discussions centred on roughly 50/50. Europe also appears to have released relatively little crude from reserves so far, with most observed drawdowns concentrated in refined products. T