The International Energy Agency has indicated that it could tap into its strategic oil reserves again if supply disruptions intensify, even as it stresses that such a move is not currently at the top of its agenda. Speaking at a meeting of EU energy ministers in Dublin, IEA Executive Director Fatih Birol said the agency has already released 400 million barrels of crude from emergency stocks since March, with about one-third of that volume still to reach the market.
Birol described the released stocks as equivalent to 20% of total reserves, adding that “80% is still in our pocket. If there is a need and if our member countries do agree with it, we are ready to act in order to address current and future market challenges.” His remarks came as European Union energy commissioner Dan Jørgensen highlighted the mounting costs of the conflict in Iran, noting that EU countries have spent more than €100 billion extra on energy imports since the war began—without receiving “not one extra molecule of gas or oil” in return.
Diesel squeeze and winter risks
The disruption of shipments through the Strait of Hormuz has tightened global oil and diesel supplies. Before the war, the waterway carried roughly a fifth of the world’s traded oil, and Europe remains heavily dependent on imported diesel. After reducing its reliance on Russian energy following the full-scale invasion of Ukraine in 2022, the EU has become more reliant on US imports, particularly for diesel.
“Europe is one of the most exposed regions—if not the most exposed one—when it comes to diesel because Europe imports a huge amount of diesel and we are entering the harsh season, the winter season,” Birol said. In August, the US supplied about half of the EU’s diesel imports. European diesel supply has been under pressure since EU sanctions on Russian oil products took effect in 2023, and disruptions in the Middle East have further increased demand for US shipments.
As Europe approaches winter with already tight diesel inventories, the US is considering export restrictions. The European Commission has called a possible US export ban a “bad idea” that could harm both economies, as thin gas reserves and high prices already loom over the continent.
Potential impact of a US export ban
Fuel prices are already elevated. The EU’s average diesel price hit a record €2.23 per litre last week, with France at €2.40 and Denmark at €2.56. According to Oxford Economics, a full US export ban could raise European wholesale diesel prices by 40% to 50%, potentially adding €0.50 to €0.60 per litre at the pump, including VAT, and shaving a few tenths of a percentage point off economic growth.
Those figures are estimates for a complete ban, not a forecast for the narrower restrictions US officials have also discussed. Oxford Economics notes that the scope, duration, and possible exemptions remain unclear. Finding alternative supplies would take time: Middle Eastern sources are constrained, and shipments from Asian refiners would take longer to reach Europe. The consultancy also expects that Europe could draw on emergency reserves if US restrictions drove diesel prices higher, potentially limiting the increase.
Even US refiners oppose a possible export ban. In a 23 September letter, the Business Roundtable, the American Petroleum Institute, and more than two dozen other groups warned President Donald Trump that an export ban could backfire. They argued that refiners might have to cut production if they could not export surplus diesel, which would also reduce their output of petrol and jet fuel.
Energy data firm Kpler says US refineries operated at more than 95% of capacity for much of the summer, reaching around 98% in the final week of August, leaving little room to raise output. Keeping exported diesel in the US could initially lower prices on the Gulf Coast, but storage and transport constraints would make it difficult to spread that relief across the country. Lower refining margins could eventually lead producers to cut output.
Oxford Economics estimates that a full ban could lower US diesel prices by roughly 30% within weeks, but it also warns that storage problems and reduced refinery runs could push up petrol and jet fuel prices, offsetting some of the benefit for US consumers. Ireland’s energy minister, Darragh O’Brien, said a US ban was “unlikely” because it would damage economies on both sides of the Atlantic, but urged the EU to prepare. “We have to be guarded. We can’t be complacent,” he said.
Jørgensen called for faster investment in electricity and power infrastructure to reduce the bloc’s reliance on imported fossil fuels. The EU has already urged member states to cut energy use as the winter gas crunch looms, and the IEA’s readiness to act underscores the fragility of the current energy landscape.
