G7 agrees to release 100mn barrels of diesel and crude under pressure from Trump

European diesel prices fell sharply on Friday as traders bet that European governments would bow to sustained US pressure and unlock emergency fuel reserves, a move that would ease a supply squeeze that has pushed pump prices to record highs on both sides of the Atlantic. The continent’s benchmark diesel futures contract dropped as much as 6 percent to $1,364 a tonne, roughly $185 a barrel, as European leaders weighed a French counter-proposal to release 50 million barrels of diesel from national stockpiles. Washington has pressed Europe to release at least 100 million barrels, with President Donald Trump threatening to ban US diesel exports if the continent refuses.

The standoff comes as the White House confronts rising fuel costs weeks before midterm elections that will determine control of Congress. Trump has asked Europe to open its strategic reserves, and the EU is now considering a plan under which member states would release 50 million barrels of diesel while other International Energy Agency members contribute an additional 50 million barrels of crude. Talks were ongoing ahead of a G7 leaders call on Friday afternoon, and no final decision had been reached on the exact split. European officials are wary of depleting strategic stocks while the duration of the conflict with Iran remains uncertain, and they are reluctant to be seen as capitulating to US demands.

The diplomatic friction is acute. One EU diplomat described member state representatives as being in “shock over the blackmail” of Trump’s demands during a crisis meeting of energy officials on Friday morning. The European Commission has rejected the threat outright. “We fully reject a US ban on diesel. A ban would not be beneficial to anyone. It would undermine our trust in the US as a reliable partner,” said Anna-Kaisa Itkonen, a Commission spokesperson. French President Emmanuel Macron, who spoke with Trump overnight, has urged G7 leaders to act in a concerted manner “without restricting exports,” according to an Elysee official. Macron called for a remote G7 meeting as soon as possible to coordinate a response.

The context is a global diesel market under severe strain. Prices have traded above $200 a barrel in the US, Europe, and Asia for several weeks, squeezed by refinery disruptions linked to the Iran war,