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

European Union nations deliberated on a French proposal on Friday to release diesel reserves in response to US pressure, aiming to alleviate surging fuel prices, according to two sources familiar with the discussions. During a Friday call, EU governments examined the French plan, which would see European countries release 50 million barrels of diesel and International Energy Agency members release 50 million barrels of crude oil. France's finance and energy ministry did not immediately address inquiries regarding the proposal.

Reuters previously reported that the Trump administration had urged Germany and France to reduce emergency diesel inventories or face potential US diesel export restrictions, based on the opinions of three individuals close to the situation. The US demanded large European countries, including France and Germany, release 100 million barrels of diesel within a 20-day period, according to one of the sources.

US President Donald Trump has hinted at the possibility of a diesel export ban to help reduce US fuel prices prior to the November 3 midterm elections.

The global diesel supply chain has been affected by the Iran war and a Russian ban on exports following Ukraine's damage to many of its refineries. Chinese refiners have also suspended fuel exports in October to increase domestic stocks, sources revealed. During the Friday call, EU nations debated that any agreement on additional diesel stock releases should be contingent upon a US commitment not to unilaterally impose a diesel export ban.

The G7 country leaders may convene a call on Friday afternoon to deliberate their subsequent actions. France currently holds the presidency of the G7. In March, the 32-member International Energy Agency (IEA) agreed to a coordinated release of 400 million barrels of strategic oil reserves in response to supply disruptions caused by the Iran war, which was the largest such release in history.