Oil prices fell sharply on Friday as Europe moved closer to another emergency stock release under pressure from the Trump administration, with WTI dropping nearly 4% and Brent falling below $100. At 6:54 a.m. ET, WTI was trading at $89.36, down 3.78%, while Brent was trading at $99.79/barrel, down 2.46%.
The selloff followed reports that European governments are discussing another coordinated release of emergency oil stocks as Washington pushes allies to put more barrels and diesel onto the market to ease the global fuel crunch.
“We are discussing with all members of the International Energy Agency (IEA), not only the United States, when the right time is to release, because this is one of the opportunities that we have,” European Energy Commissioner Dan Jørgensen told Euronews’ Europe Today program in an interview.
“We’ve used it before, and we’ll likely use it again,” Jørgensen said, noting that releasing oil from strategic reserves to try to curb soaring fuel prices “is a possibility”.
Amid intensifying U.S. pressure, the European Commission held a call on Thursday with several countries, including the non-EU country UK, to assess different scenarios, an EU source told Euronews.
The U.S. Administration has urged Germany and France, Europe’s largest economies that hold a sizeable chunk of the EU’s emergency reserves, to release diesel from emergency stockpiles or face a potential U.S. diesel export ban, sources close to the discussions told Reuters on Thursday.
Since crude oil prices jumped again in September to above $100 per barrel and the global fuel markets, especially for diesel, continued to tighten, diesel prices hit record highs in many countries, including in the United States.
Combined, Germany and France hold about 35% of the EU’s strategic diesel reserves. The EU is estimated to hold about 39 million tons of diesel, which is equivalent to more than two months’ consumption of the bloc.
The U.S. is pressuring European countries that haven’t released all the emergency stocks pledged under the IEA-led stock drawdown in the early weeks of the Iran war to do so now.
Earlier this week, U.S. Energy Secretary Chris Wright said, “While the United States and Japan are delivering on their commitments, several European member countries have released only a fraction of the crude oil and petroleum products they pledged. We urge every member country to fulfill its commitments.”
By Charles Kennedy for Oilprice.com
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