The selloff comes as Washington pushes its European allies to release diesel and crude from strategic reserves to combat a tightening global fuel supply. European Energy Commissioner Dan Jørgensen confirmed that discussions are underway with International Energy Agency members, noting that tapping into strategic stockpiles remains a viable option to curb soaring costs.

Behind the scenes, the U.S. has escalated its demands, particularly targeting Germany and France. According to reports, the Biden administration has hinted at a potential diesel export ban if these nations fail to release their respective stockpiles. Together, France and Germany command roughly 35% of the EU’s strategic diesel reserves, totaling approximately 39 million tons. U.S. Energy Secretary Chris Wright recently criticized several European members for failing to fulfill prior drawdown commitments made earlier this year. With diesel prices reaching record highs, the geopolitical standoff over these reserves has become a primary driver of market volatility.