US President Trump said on Friday that Europe has agreed to release a large amount of diesel reserves to ease the global fuel supply crunch caused by conflicts in the Middle East and Eastern Europe, according to a report.

Previously, the average US diesel price surged to a record high of $6.50 per gallon. With Europe potentially taking coordinated action to release energy reserves, international oil prices fell sharply in early trading on Friday.

Trump wrote on social media that day that Europe has just agreed to release a large amount of well-stocked diesel reserves, and the relevant process will begin immediately. Meanwhile, media reported, citing people familiar with the matter, that France has proposed that EU member states release 50 million barrels of diesel reserves, with International Energy Agency (IEA) member countries releasing an additional 50 million barrels of crude oil reserves. However, the plan has not been independently confirmed, and the specific implementation arrangements remain uncertain.

US Diesel Prices Hit Record High as Europe Plans Joint Energy Reserve Release

Global diesel markets continue to face pressure from supply disruptions caused by the Iran war and the Russia-Ukraine conflict. According to American Automobile Association (AAA) data, the average US diesel retail price rose to a record high of $6.50 per gallon in late September, up sharply from a year earlier.

Diesel is widely used in freight, agriculture, industrial production and other economic activities. Sustained price increases not only push up transportation and business operating costs, but may also further intensify US inflationary pressure. With the November US midterm elections approaching, the Trump administration is facing growing political pressure to take measures to curb fuel price increases.

US Treasury Secretary Bessent said on social media on Thursday that America's European partners should accelerate the fulfillment of existing commitments and immediately provide more supply to address ongoing energy market disruptions. Bessent stressed that the United States is taking action and expects allies to turn commitments into concrete measures.

As the US government applies pressure, EU member states plan to hold emergency consultations on Friday to discuss how to coordinate a response to the surge in diesel prices. Media reported, citing an anonymous person familiar with the discussions, that France's proposal includes EU countries releasing 50 million barrels of diesel reserves while pushing IEA member states to release 50 million barrels of crude oil reserves.

After the news emerged, international oil prices fell noticeably in early trading on Friday, reflecting market expectations that additional energy supply could ease tight conditions. However, the reports have not been independently verified, and the French government and the IEA did not immediately comment. Therefore, how much reserves Europe will ultimately release, when it will be implemented, and how countries will share the burden still need to be clarified.

US Diesel Export Restrictions Raise European Concerns as EU Relies on the US for About Half of Its Imports

Against the backdrop of continued diesel supply tightness, the prospect that the United States may restrict diesel exports has also drawn close attention in European energy markets. The United States is the world's largest diesel exporter. If the Trump administration imposes a comprehensive diesel export ban, it could not only affect global fuel trade but also deal a direct blow to European supply.

According to IEA data, in August this year, diesel supplied by the United States accounted for about half of the EU's total diesel imports, highlighting the European market's dependence on US diesel supply. This backdrop has also made potential US export restrictions a target of opposition from the US energy industry and a source of concern in Europe.

EU trade chief Maros Sefcovic said during the G20 trade ministers' meeting in Milwaukee that he had discussed diesel supply and the price surge with US Trade Representative Jamieson Greer. Sefcovic noted that both Europe and the United States have ample reason to cooperate in pushing down prices of diesel and other oil and gas products.

He also said that if the United States takes measures to restrict diesel exports, it would be an unexpected move and could negatively affect Europe's economic outlook. For the EU, a joint reserve release could both increase short-term market supply and help ease pressure from potential US export restrictions. However, whether reserve releases can sustainably lower diesel prices still depends on the recovery of global energy supply.

Macquarie: The Diesel Crisis Is Fundamentally a Global Energy Supply Problem

Although Europe and the United States are discussing releasing strategic reserves, some energy analysts believe such measures may only temporarily ease market pressure and are unlikely to fundamentally solve the global energy supply crunch. Walt Chancellor, an energy strategist at Macquarie Group, said in a research note on Thursday that the core problem facing the United States is not just a diesel shortage, nor merely insufficient refined product supply, and may even go beyond the oil market to a broader global energy problem.

Chancellor believes the real solution is to allow more oil to pass through the Strait of Hormuz from the Middle East into global markets. He said that without restoring stable supply through this key energy transport route, other measures would mostly amount to redistributing existing resources and would be unlikely to materially increase global energy supply.

The Strait of Hormuz is one of the world's most important oil transport routes. In late February this year, after the United States and Israel launched strikes on Iran, ship traffic through the strait was severely affected, further worsening global crude oil and fuel supply tightness. However, this week energy transport through the Strait of Hormuz has shown signs of recovery, with data showing that daily oil exports through the strait have rebounded to pre-war levels.

This change offers some signal of supply improvement for global energy markets, but whether the supply chain disruptions caused by the earlier conflict and the tight diesel market can be quickly eased remains to be seen.