Europe weighs new diesel stocks release after US pressure, sources say

By Kate Abnett

BRUSSELS, Oct 2 (Reuters) - European Union countries discussed a French proposal on Friday to release diesel stocks in response to US pressure to help cool surging fuel prices linked to the Iran war, three sources familiar with details of the discussion told Reuters.

The proposal, discussed on a call involving EU governments, calls for European countries to release 50 million barrels of diesel and International Energy Agency members to release 50 million barrels of crude oil, the sources said.

French President Emmanuel Macron is scheduled to chair a videoconference with G7 leaders at 2:30 p.m. Paris time (1230 GMT) focused on the global energy situation, the Elysee Palace said.

Europe would release part of the diesel volumes in a 20-day period, responding to US President Donald Trump's demand for a rapid release of fuel stocks, two of the sources said.

Oil prices fell more than 2% and European gasoil futures fell by about 5% on Friday after reports of the talks. Benchmark European diesel futures were trading 4.5% lower at $1,384.50 a metric ton at 1245 GMT, LSEG data showed. European diesel refining margins were down 4.4% at $73.30 a barrel, having hit a record of about $95 last week.

The discussions underscore growing pressure on Europe as Trump considers a potential ban on US diesel exports to help lower domestic fuel prices ahead of November 3 midterm elections.

In weighing its response, the EU needs to balance the need to ease soaring fuel costs against preserving emergency reserves to safeguard against uncertain supply from Gulf producers due to disruptions caused by the Iran war.

France's finance and energy ministry did not immediately respond to a request for comment.

French President Macron spoke with Trump overnight, emphasising the need to work together to combat rising fuel prices and ensure the global availability of refined products, the Elysee Palace said on Friday. France currently holds the presidency of the G7.

Reuters reported on Thursday that the Trump administration had told Germany and France to draw down emergency diesel inventories or face a potential US diesel export ban, according to three people close to the discussions.

The US had demanded large European countries including France and Germany release 100 million barrels of diesel within a 20-day window, two of the sources told Reuters on Friday.

Global diesel supply has been hit by the US war with Iran and a Russian ban on exports after Ukraine damaged many of its refineries. Chinese refiners have also suspended October fuel exports to bolster domestic stocks, sources said.

The proposed 50-million-barrel release equates to approximately 17% of the EU's total emergency stocks of diesel and gasoil, Eurostat data current as of May 2025 showed.

It reflects around 3% of the bloc's annual consumption of the fuel, Eurostat data show.

Europe used to mainly rely on Russian and Middle Eastern diesel imports but has increasingly relied on imports from the United States in recent years.

"Having been caught dragging their feet on promised strategic stock releases earlier this year and now jarred by possible U.S. export restrictions, European countries will likely release more diesel and possibly crude from their stocks," said Bob McNally, president of Rapidan Energy Group.

"European strategic stock releases are a necessary, if not sufficient, condition to prevent U.S. export restrictions, which would still remain on the table given acute political anxiety in the White House about high pump prices."

In the call on Friday, EU countries discussed making a condition for any agreement on diesel stock releases a US commitment to not impose a unilateral diesel export ban, one of the sources said.

The 32-member IEA agreed in March to a coordinated release of 400 million barrels of strategic oil reserves, in response to the Iran war, the largest such release in history.

IEA Executive Director Fatih Birol said this week that members had released about two-thirds of those volumes.

(Reporting by Kate Abnett, additional reporting by Forrest Crellin, Ahmad Ghaddar, Robert Harvey and Jarrett Renshaw; editing by Kirsten Donovan and Jason Neely)