Key facts
- WTI crude oil fell nearly 4% to $89.36 a barrel.
- Brent crude oil fell below $100 to $99.79 a barrel.
- Europe is considering releasing emergency oil stocks under U.S. pressure.
- The U.S. is urging European countries to release more diesel from emergency reserves.
- Germany and France hold about 35% of the EU's strategic diesel reserves.
Oil prices experienced a significant decline on Friday, with West Texas Intermediate (WTI) crude futures dropping nearly 4% and Brent crude falling below the $100 mark. At 6:54 a.m. ET, WTI was trading at $89.36 a barrel, down 3.78%, while Brent was quoted at $99.79 a barrel, down 2.46%. The selloff was driven by reports that European governments are contemplating another coordinated release of emergency oil stocks. This move is being pushed by the U.S. administration, which is urging allies to increase the supply of crude oil and diesel onto the market to alleviate a global fuel crunch. European Energy Commissioner Dan Jørgensen indicated that releasing oil from strategic reserves to curb soaring fuel prices is a viable option. "We are discussing with all members of the International Energy Agency (IEA), not only the United States, when the right time is to release, because this is one of the opportunities that we have," Jørgensen told Euronews. He added, "We've used it before, and we'll likely use it again." Following intensifying U.S. pressure, the European Commission held discussions on Thursday with several countries, including the UK, to evaluate different scenarios, according to an EU source. The U.S. administration has specifically urged Germany and France, Europe's largest economies, to release diesel from their emergency stockpiles or risk a potential U.S. diesel export ban, sources close to the discussions told Reuters. Record high diesel prices have been observed in many countries, including the U.S., since crude oil prices surged above $100 per barrel in September and global fuel markets tightened. Germany and France collectively hold approximately 35% of the EU's strategic diesel reserves, which are estimated to be around 39 million tons, enough for more than two months of consumption for the bloc. The U.S. is also pressing European nations that have not yet released their full pledged emergency stocks from the IEA-led drawdown earlier in the year. U.S. Energy Secretary Chris Wright stated earlier this week that while the U.S. and Japan are meeting their commitments, "several European member countries have released only a fraction of the crude oil and petroleum products they pledged. We urge every member country to fulfill its commitments."