European governments are discussing a major release of emergency diesel inventories as policymakers intensify efforts to contain fuel prices and protect the economy from a widening global refined-products shortage.
France has proposed that European countries release 50 million barrels of diesel, according to people familiar with the discussions.
The proposal would be paired with another 50 million barrels of crude oil released by members of the International Energy Agency.
European governments discussed the plan Friday as pressure intensified to address fuel shortages created by disruptions associated with the Iran war, reduced Russian supplies and China’s suspension of October fuel exports.
The proposed European diesel release is substantial.
Fifty million barrels would represent approximately 17% of the European Union’s emergency diesel and gasoil inventories and roughly 3% of the bloc’s annual consumption.
Under the proposal, part of the European diesel inventory would be released during a 20-day period.
The United States has pushed France and Germany to release emergency diesel supplies as Washington considers restricting U.S. diesel exports in an effort to reduce domestic fuel prices.
European governments are discussing whether any agreement should be conditional on a U.S. commitment not to impose a unilateral diesel export ban.
The negotiations illustrate how the energy shock has shifted from crude availability toward refined products.
Russian refinery disruptions have restricted fuel exports, Chinese refiners have suspended October exports to rebuild domestic inventories, and conflict in the Middle East has further complicated global supply.
Europe has also become increasingly dependent on U.S. diesel since reducing Russian energy imports, making a potential American export restriction especially significant.
The International Energy Agency already authorized a record coordinated release of 400 million barrels of strategic oil reserves in March in response to the Iran war. Roughly two-thirds of those volumes have been released, according to IEA Executive Director Fatih Birol.
The immediate question is whether governments approve another coordinated intervention and whether additional barrels are sufficient to materially reduce diesel prices.
A sustained decline in refined-fuel prices would have implications far beyond energy markets. Diesel costs feed directly into trucking, agriculture, manufacturing and distribution, making them an important transmission channel from the energy shock into consumer inflation.
