Brent Below $100: Europe Discusses Selling Reserves Under Pressure from Washington

The benchmark Brent crude oil price fell below $100 per barrel on October 2 after Reuters reported that France had proposed selling oil and diesel from its reserves. During trading, Brent futures fell 3.3% to $98.9 per barrel. Contracts for WTI, the North American benchmark, dropped 4.4% to $88.8. Diesel prices also fell: European futures dropped by nearly 6%, to about $185 per barrel, according to the Financial Times (FT).

According to two Reuters sources, on October 2, EU countries discussed a proposal by France to sell 50 million barrels of diesel from European reserves and the same amount of crude oil from the reserves of International Energy Agency (IEA) members. Washington is insisting on a different volume and composition of the supplies: it has demanded that major European countries, including France and Germany, release 100 million barrels of diesel onto the market within 20 days, one of the agency’s sources said.

In March, Europe committed to selling 73 million barrels of petroleum products from its reserves as part of the IEA’s 400-million-barrel program, adopted in response to the conflict in the Middle East, the FT notes. However, some countries have not yet fulfilled their obligations, said Fatih Birol, the agency’s head. As one diplomat told the publication, Washington is demanding that the remaining volume be supplied and that the total be increased to 100 million barrels.

The Trump administration has threatened France and Germany with a ban on diesel exports from the U.S. if they do not begin to tap into their emergency reserves, three sources told Reuters. The U.S. president is seeking to lower fuel prices in his country ahead of the Nov. 3 midterm elections. According to a diplomat interviewed by the FT, EU officials were “shocked by Trump’s blackmail.”

French President Emmanuel Macron called for joint efforts to combat rising gasoline prices during a late-night conversation with Trump, the FT reports. He proposed holding a virtual G7 meeting as soon as possible. “[Macron] emphasized that the G7 countries are interested in coordinated action without export restrictions,” the Élysée Palace said.

European leaders, however, do not want to make a decision under pressure and are cautious about drawing down reserves as long as it remains unclear how long the war in the Middle East will last, the FT reports. Meanwhile, diesel prices in the U.S., Europe, and Asia have been above $200 per barrel for several weeks due to disruptions at oil refineries and export restrictions.

Global diesel supplies have been affected by the war with Iran and the Russian export ban imposed following Ukrainian strikes on oil refineries. Reuters sources also reported that Chinese refiners suspended overseas fuel shipments in October to replenish domestic stocks. For this month, Beijing has allowed the largest refineries to ship fuel from mainland China only to Hong Kong and Macau, the FT reports.

This article was AI-translated and verified by a human editor