Oil gave back Thursday's gains as EU officials met on an emergency stock release under U.S. pressure. A threatened American diesel export ban hangs over the talks.
Oil prices fell sharply overnight as European governments convened to discuss releasing emergency fuel stocks, prodded by a blunt warning from Washington.
Brent crude dropped 2.9% to $99.35 a barrel early Friday, down from $102.31, after trading as high as $102.91. West Texas Intermediate fell 3.9% to $89.29, and heating oil, a proxy for diesel, slid 3.6%. The decline unfolded during Asian and European hours, erasing much of Thursday's rally.
The pressure campaign
Washington has told its European partners that if they do not free up more diesel, the U.S. could stop exporting it, a European Commission spokesperson said. Energy Commissioner Dan Jorgensen said a new emergency release is "a possibility," adding: "We've used it before, and we'll likely use it again." Ireland, which holds the rotating Council presidency, confirmed a meeting on Friday.
Treasury Secretary Scott Bessent pressed the point publicly. "Our European partners should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions," he wrote on social media.
French President Emmanuel Macron spoke with President Trump overnight. The two countries share a "common interest" in coordinated action "without export restrictions," the Elysee said, and called for a Group of Seven leaders' videoconference "as soon as possible."
No release decision had been announced as of early Friday.
The export-ban lever
The threat of a U.S. diesel export ban gives the talks their urgency. By one Wall Street estimate, such a measure would cut U.S. diesel prices by about 4% while raising costs in Europe, which has leaned on imported diesel to cover its needs. For Washington, it is a way to protect domestic fuel prices heading into winter. For Europe, it is a reason to draw down its own stocks before the decision is made for it.
The scale of past action offers a reference point. The International Energy Agency's coordinated release in March totaled 400 million barrels.
A release borrows time
Emergency stocks can cap prices for weeks, but they do not add supply permanently. The underlying constraints remain: China's suspension of fuel product exports, Russia's diesel export ban and the risk around the Strait of Hormuz, where U.S. and Iranian negotiators remain far apart. Tanker traffic through the strait has been recovering, with September LNG exits the highest since the conflict began, but a single incident could reverse that.
What to watch: The Brent-WTI spread, now about $10 a barrel. A wider gap would signal that Europe's supply squeeze is intensifying relative to the U.S. even after a stock release, while a narrowing spread would suggest the reserves are doing their job.