European leaders agreed Friday to a rapid release of diesel from emergency stockpiles after pressure from the Trump administration, pulling oil prices down as much as 5%. The Group of Seven plans to release 100 million barrels of refined products over four months, as record U.S. diesel prices become a flashpoint ahead of the midterm elections.
European leaders agreed Friday to a rapid release of some diesel stockpiles, pulling oil prices down as much as 5% on the day, after the Trump administration pushed for action. The White House had floated temporarily banning U.S. diesel exports, a fuel that in late September hit a record high of about $6.50 a gallon domestically.
The average U.S. diesel price stood at $6.37 a gallon on Friday, according to AAA. The surge has become a hot-button issue with U.S. midterm elections about a month away.
G-7 commits to a 100 million barrel release
The Group of Seven said Friday it plans to release 100 million barrels of refined products over the next four months in coordination with the International Energy Agency, including a "substantial" diesel release within the first 20 days. On Truth Social, President Trump said: "Europe has just agreed to release a massive amount of their heavily stocked Diesel Oil." Patrick De Haan, head of petroleum analysis at GasBuddy, called the move significant and said it could temporarily help push gasoline and diesel prices down ahead of November's vote.
How 'strategic' is the release?
Still, De Haan said the size of the release matters less than whether it represents real additional supply or simply shifts inventories between columns. Tom Kloza, chief energy adviser at Gulf Oil, said Europe's "strategic" diesel stocks are hard to assess because, unlike the U.S. Strategic Petroleum Reserve's underground salt domes, they come from generally circulated commercial inventory. The 27 EU countries held about 39 million metric tons of gasoil and diesel — equivalent to roughly 290 million barrels — in emergency reserves as of May 2025, according to Eurostat.
Crude and diesel futures slide
November West Texas Intermediate crude fell to as low as $88.06 a barrel during Friday's session, the lowest intraday level since Sept. 1, before settling 1.7% lower at $91.32. Brent crude's December contract fell 1% to $101.34 a barrel.
Diesel futures fell further: the November ultralow sulfur diesel contract, also called heating oil, lost 3.2% to $4.49 a gallon after touching a low of $4.38, its weakest since Aug. 28.
Relief uneven across markets
Rebecca Babin, senior energy trader at CIBC Private Wealth, said Europe should see more direct relief than the U.S., noting the U.S. supplied about 41% of Europe's diesel imports in September. If the releases reduce Europe's pull on U.S. cargoes, that could ease pressure on American supplies and compress diesel prices and refining margins, she said. Michael Lynch, president at Strategic Energy & Economic Research, said the release likely won't help Asian markets quickly, since rerouted supplies will take a few weeks to offset China's decision to ban product exports this month.
A White House reporter for Reuters wrote on X that Washington is preparing an executive order to ease diesel prices, which could be unveiled as early as next week and may expand use of tax-exempt red-dyed diesel. The White House didn't immediately respond to a request for comment. Rob Thummel, senior portfolio manager at Tortoise Capital, said the diesel market still needs global refining capacity to expand and Russian diesel exports to resume before prices ease over the longer term.
Source: MarketWatch
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