U.S. diesel prices hit a record high; Trump says Europe agreed to release large reserves to ease supply pressure.

U.S. President Donald Trump said on Friday that Europe has agreed to release a large volume of diesel reserves to ease the tight global fuel supply caused by conflicts in the Middle East and Eastern Europe. Earlier, the average U.S. diesel price had surged to a record high of $6.5 per gallon. As Europe may take coordinated action to release energy reserves, international oil prices fell sharply in early trading on Friday. In a post on social media that day, Trump said Europe had just agreed to release a large volume of well-stocked diesel reserves, and the relevant process would begin immediately. Meanwhile, media reports citing people familiar with the matter said 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 yet been independently confirmed, and the specific implementation arrangements remain uncertain. U.S. Diesel Prices Hit a Record High; Europe Plans Joint Release of Energy Reserves Affected by supply disruptions caused by the Iran war and the Russia-Ukraine conflict, the global diesel market has remained under pressure. According to data from the American Automobile Association (AAA), the average U.S. retail diesel 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 transport, agriculture, industrial production and other economic activities. Continued price increases not only push up transportation and business operating costs, but may also further intensify U.S. inflationary pressure. With the U.S. midterm elections approaching in November, the Trump administration is facing growing political pressure to take measures to curb rising fuel prices. U.S. Treasury Secretary Bessent said on social media on Thursday that Washington's European partners should accelerate the fulfillment of existing commitments and immediately provide more supply to address persistent energy market disruptions. Bessent stressed that the United States is taking action and expects allies to turn commitments into concrete measures. As the U.S. 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. According to media reports citing an anonymous person familiar with the discussions, France's proposal includes EU countries releasing 50 million barrels of diesel reserves while also 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 may ease the tense situation. However, the reports have not yet 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 further clarified. U.S. Diesel Export Restrictions Raise European Concerns; EU Relies on the U.S. for About Half of Its Imports Against the backdrop of continued tight diesel supply, the prospect that the United States may restrict diesel exports has also drawn close attention from Europe's energy market. The United States is the world's largest diesel exporter. If the Trump administration imposes a full 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 U.S. diesel supply. This background has also made potential U.S. export restrictions subject to opposition from the U.S. energy industry and triggered concerns in Europe. EU trade chief Maros Sefcovic said during the G20 trade ministers' meeting in Milwaukee that he had discussed diesel supply and the surge in prices with U.S. Trade Representative Jamieson Greer. Sefcovic noted that both Europe and the United States have strong reasons to cooperate in pushing down prices for diesel as well as 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 have a negative impact on Europe's economic outlook. For the EU, a joint release of reserves could both increase market supply in the short term and help ease the pressure brought by potential U.S. export restrictions. However, whether the reserve release can sustainably push down diesel prices still depends on the recovery of global energy supply. Macquarie: The Diesel Crisis Is Essentially 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 currently facing the United States is not just a diesel shortage, nor merely insufficient refined product supply, and perhaps not even just a problem in the oil market, but a broader global energy issue. 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 if stable supply through this key energy transportation channel cannot be restored, other measures will mostly amount to redistributing existing resources and will be unlikely to materially increase global energy supply. The Strait of Hormuz is one of the world's most important oil transportation routes. In late February this year, after the United States and Israel launched attacks on Iran, ship traffic through the strait was severely affected, further intensifying tight global crude oil and fuel supply. However, this week there have been signs of recovery in energy transportation through the Strait of Hormuz. Data show that daily oil exports through the strait have rebounded to pre-war levels. This change provides a certain signal of supply improvement for the global energy market, but whether the supply chain disruptions caused by the earlier conflict and the tight diesel market can be quickly eased remains to be seen.