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Oil prices were sharply lower on Friday morning, extending losses from earlier in the session, following reports of a potential move to release diesel and crude stocks to ease a global supply shortage.
International benchmark Brent crude futures with December expiry traded 3.1% lower at $99.13 per barrel, while U.S. West Texas Intermediate futures with November expiry fell 4% to $89.18.
It comes shortly after Reuters reported that European Union member states were discussing a French proposal to release additional diesel reserves following pressure from the Trump administration.
The report, which cited a single unnamed source familiar with details of the discussion, said France had proposed that EU nations release 50 million barrels of diesel and International Energy Agency members release 50 million barrels of crude oil.
CNBC could not independently verify the report. A spokesperson for the French government and the IEA were not immediately available to comment.
The EU is holding crisis talks on Friday to discuss a coordinated response to soaring diesel prices after U.S. Treasury Secretary Scott Bessent called on European countries to urgently release some of the continent’s reserves.
In a post on social media, Bessent said Thursday that aAmerica’s European partners “should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions.”
He added: “American farmers, truckers, and businesses should not be left carrying the burden of a global diesel shortage.”
U.S. President Donald Trump, who has repeatedly touted the prospect of a diesel export ban, appeared to cool on the idea earlier this week, following a resurgence in crude exports through the strategically vital Strait of Hormuz.
The U.S. supplied around half of the EU’s diesel imports in August, according to the International Energy Agency, underscoring the 27-nation bloc’s exposure to a potential export ban.
Oil prices settled higher in the previous session amid a report that the U.S. is sending a third aircraft carrier strike group to the Middle East, along with an amphibious force carrying 2,000 Marines, raising the stakes for an escalation in the months-long conflict.