The global energy crisis has entered a revealing new phase. The G7’s decision to release up to 100 million barrels of oil and diesel from strategic reserves is not an intervention to cool an overheated market but an admission that an increasingly interconnected energy system can be destabilised with alarming speed ~ and that governments have limited choices once the disruption reaches the fuel pump.

The immediate concern is diesel. Unlike petrol, diesel is woven deeply into the machinery of the real economy. Trucks carry food and manufactured goods; farmers depend on diesel-powered equipment; construction, mining and industry consume it in large quantities. A sustained increase in diesel prices therefore does not remain an energy story. It becomes a transport story, an inflation story and eventually a household-income story. That explains the urgency behind the G7 decision. A substantial portion of the reserves is to be released quickly, with the initial emphasis on diesel. The objective is not to make energy cheap but to prevent a supply squeeze from becoming self-reinforcing.

Expensive fuel raises costs that feed into prices, and fears of shortages encourage........

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