President Donald Trump announced Friday that European nations have agreed to begin releasing large quantities of diesel from emergency reserves as part of an international effort to bring down fuel prices that have surged across the United States.
The move follows several days of pressure from the Trump administration on European allies, particularly France and Germany, to put more of their strategic fuel stockpiles onto the global market. “Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil,” Trump announced Friday. “The process will begin immediately.”
The agreement was finalized during a videoconference of Group of Seven leaders chaired by French President Emmanuel Macron, whose country currently holds the rotating G7 presidency. The G7 subsequently announced a coordinated release of 100 million barrels of petroleum reserves through the International Energy Agency.
The stocks will be released over four months, but governments agreed to front-load the effort with a “substantial” release of diesel during the first 20 days. The action comes as American diesel prices remain near record highs. The national average stood at approximately $6.37 per gallon Friday, according to AAA, after reaching a record $6.52 on Sept. 22.
Diesel prices have climbed sharply during the eight-month conflict with Iran, which has disrupted energy supplies and shipping from the Middle East.
Additional pressure has come from Russia’s restrictions on diesel exports following Ukrainian attacks on Russian refineries and China’s decision to suspend fuel exports in October to preserve supplies for its domestic market.
The combination has tightened the global diesel market just as the United States enters the fall harvest season and colder weather increases demand for heating oil, which is closely related to diesel. Energy Secretary Chris Wright said Thursday that releasing European reserves could provide additional supply when it is particularly needed.
“This is a time for a coordinated release of diesel stores as we go into harvest season and we go into winter heating oil season,” Wright said. “Now’s the time to bring more diesel to the market, and that diesel is available.” Wright added he was “highly confident” European governments would act and predicted that positive news was coming.
Behind the public negotiations was considerable pressure from Washington. The Trump administration had told France and Germany to begin drawing down emergency diesel inventories or potentially face restrictions on U.S. diesel exports, Reuters reported. American officials had initially sought a European release substantially larger than the amount ultimately discussed Friday.
European Union governments considered a French proposal calling for Europe to release approximately 50 million barrels of diesel, accompanied by another 50 million barrels of crude oil from International Energy Agency members.
The proposed 50-million-barrel diesel drawdown would represent approximately 17% of the European Union’s emergency diesel and gasoil stocks and about 3% of the bloc’s annual consumption. Trump had also been considering temporarily restricting U.S. diesel exports in an effort to increase domestic supplies.
Such a move had support from some Republicans representing agricultural states, where higher diesel prices have become particularly painful for farmers operating fuel-intensive machinery. But analysts warned that an export ban could have unintended consequences, including disruptions to refinery operations and potentially higher prices for other petroleum products.
European officials were also concerned because the continent has become increasingly dependent on American refined fuel following its move away from Russian energy imports. EU officials discussed seeking assurances that Washington would not impose a unilateral export ban if Europe agreed to release its reserves.
The announcement produced an immediate reaction in energy markets even before the final G7 agreement was announced. Oil prices fell more than 2% Friday, while European gasoil futures dropped roughly 5% after reports emerged that governments were preparing the coordinated release.
