EU agrees to release diesel stocks after US pressure, G7 seals 100-million-barrel plan
EU agrees to release diesel stocks after US pressure, G7 seals 100-million-barrel plan
Europe has agreed to release emergency diesel stocks after pressure from the United States, ending days of brinkmanship over a threatened American diesel export ban. The Group of Seven said on Friday that its members would carry out a coordinated release of 100 million barrels of diesel and crude oil through the International Energy Agency over the next four months, beginning immediately, with a frontloaded diesel release in the first 20 days.
US President Donald Trump announced the breakthrough on Truth Social: “Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil. The process will begin immediately.” The decision came at a French-chaired G7 videoconference on Friday afternoon, capping talks that moved within 24 hours from weighing a release to agreeing one.
How the diesel stocks deal was reached
The agreement followed an ultimatum from Washington. The Trump administration had pressed European governments to release emergency diesel inventories to cool surging fuel prices, warning that failure to act could trigger a US ban on diesel exports. Such a ban would have hit Europe hard, since the continent has grown increasingly reliant on American diesel while the Iran war disrupted supplies from Gulf producers.
Under the French proposal, Europe would release 50 million barrels of diesel and IEA members a further 50 million barrels of crude, with Europe moving part of its volumes within the 20-day period Trump demanded. That diesel release would equal roughly 17 per cent of the EU’s emergency diesel and gasoil stocks, or about 3 per cent of annual consumption, per Eurostat data.
Why diesel prices became a political emergency
The price of diesel has become an acute political problem on both sides of the Atlantic. In the United States, diesel hit a record of about $6.50 a gallon in late September and stood at an average of $6.37 on Friday, according to the AAA motor club. The average price in the EU is $9.53 a gallon, based on European Commission data.
Trump is seeking to cool fuel prices ahead of November’s midterm elections. Earlier on Friday, the European Commission had sharply criticised the proposed US export ban. “A ban would not be beneficial to anyone,” spokesperson Anna-Kaisa Itkonen said, warning it would undermine trust in the US as a reliable partner. By Friday evening, Trump said the ban was off the table: “We’re not going to be doing the export ban.”
What happens next
The G7 statement said members would refrain from export restrictions among themselves and reconvene within the IEA “in the coming days to discuss the possibility of additional diesel releases as necessary”.
Markets reacted quickly: US diesel futures fell 3.25 per cent to $4.49 a gallon, while European diesel futures fell by roughly $83 per metric ton. Analysts cautioned the relief may be temporary. “Raiding an oil supply piggybank is no substitute for solving the underlying problem which is insufficient production relative to demand,” said energy strategist Clay Seigle.
The backdrop remains fragile. The Iran war triggered the biggest emergency stock release ever in March, 400 million barrels coordinated by the IEA, of which members have released about two-thirds, according to IEA Executive Director Fatih Birol. European governments had resisted this latest release for weeks, fearing they could be left exposed this winter if the conflict drags on.
Frequently asked questions
How much diesel will Europe actually release?
Under the French proposal, Europe would release 50 million barrels of diesel, with part of the volumes moved within a 20-day period. The G7 statement committed to a coordinated 100-million-barrel release over four months, with a frontloaded diesel release in the first 20 days, but gave no full breakdown by fuel or country.
Will the release lower diesel prices at the pump?
Analysts said the decision may temporarily push diesel prices down but is unlikely to have a lasting effect, pointing to the underlying imbalance between production and demand.
Did the US drop its diesel export ban threat?
Yes. After the agreement, Trump said the US would not impose a diesel export ban, adding it was never really on the table, though he had said several times in the previous two weeks that it was under consideration.
