European Union governments have discussed releasing a significant portion of their diesel reserves following pressure from the United States to increase fuel supplies and help ease rising prices.
US President Donald Trump said Europe had agreed to release a “massive amount” of its diesel stocks, with the process expected to begin immediately.
The announcement followed discussions among EU governments on Friday over a French proposal to release 50 million barrels of diesel from European stocks. The proposal also called for members of the International Energy Agency (IEA) to release an additional 50 million barrels of crude oil, according to sources familiar with the talks.
Under the proposal, part of Europe’s diesel reserves would be released over a 20-day period in response to US demands for a rapid increase in fuel supplies.
French President Emmanuel Macron also chaired a videoconference with G7 leaders to discuss the global energy situation. It remained unclear whether G7 members had agreed on the proposed volumes.
Oil and fuel markets reacted to reports of the planned stock release. US diesel futures fell more than 4pc to $4.4491 per gallon, while benchmark European diesel futures declined by more than $100 per metric ton.
The discussions come as the Trump administration considers restricting US diesel exports in an effort to lower domestic fuel prices ahead of the November 3 midterm elections.
According to sources, Washington has urged Germany and France to reduce their emergency diesel inventories and has pushed for major European countries to release up to 100 million barrels of diesel within 20 days.
European governments are weighing the potential impact of releasing emergency stocks against the need to maintain reserves amid uncertainty over fuel supplies from Gulf producers following disruptions linked to the conflict involving Iran.
Macron spoke with Trump overnight and stressed the need for cooperation to address rising fuel prices and maintain global supplies of refined petroleum products, according to the French presidency.
Global diesel supplies have been affected by disruptions linked to the Iran war, while Russia has restricted exports following damage to several of its refineries in attacks by Ukraine.
China has also suspended some fuel exports as its refiners seek to strengthen domestic inventories.
The proposed release of 50 million barrels would represent approximately 17pc of the EU’s emergency diesel and gasoil stocks and around 3pc of the bloc’s annual consumption, according to Eurostat data.
Europe, which previously relied heavily on diesel imports from Russia and the Middle East, has increasingly turned to the United States for supplies in recent years.
Energy analyst Bob McNally said European countries could release additional diesel and crude reserves amid pressure from possible US export restrictions.
