Europe Weighs Diesel Stock Release as US Pressure Mounts, Sources Say

European Union countries discussed a French proposal to release diesel stocks due to US pressure related to soaring fuel prices and the Iran war. The proposal suggests that Europe should release 50 million barrels of diesel, while members of the International Energy Agency (IEA) would release another 50 million barrels of crude oil. French President Emmanuel Macron will hold a videoconference with G7 leaders to talk about the global energy situation.

The proposed release would occur over a 20-day period, responding to US President Trump’s request for a quick release of fuel stocks. Following news of these discussions, oil prices fell over 2%, and European gasoil futures dropped about 5%. The negotiations highlight growing pressure on Europe since Trump is considering banning US diesel exports to help lower domestic prices ahead of the midterm elections.

The EU needs to balance the urgent need to lower fuel costs with the importance of maintaining emergency reserves against supply disruptions from Gulf producers due to the Iran conflict. Macron emphasized cooperation with Trump to address rising fuel prices and ensure global availability of refined products. The US has urged Germany and France to reduce emergency diesel inventories or face a potential export ban.

Global diesel supply has been impacted by the US-Iran war and Russian export bans, alongside China suspending fuel exports to maintain domestic stocks. The proposed release of 50 million barrels represents around 17% of the EU’s total emergency diesel stocks and about 3% of its annual diesel consumption. Historically, Europe relied on Russian and Middle Eastern diesel but has increasingly sourced it from the US in recent years.

EU countries also discussed tying any diesel stock release agreement to a US commitment not to impose a unilateral diesel export ban. The IEA previously agreed to release 400 million barrels of strategic oil reserves in response to the Iran war.