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Phil Flynn

Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665

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Please Release Me. The Energy Report 10/02/2026

By On October 2, 2026 - 9:15 AM · In Market Commentaries, Phil Flynn Energy Report
Please release me; let diesel go. Apparently, the Trump administration seemed to help Europe find its wallet—or at least its diesel reserve—as it shamed European leaders into releasing 50 million barrels of diesel and gasoline supplies from reserves, according to sources familiar with discussions at the International Energy Agency. This came after the Trump administration criticized the EU and pointed the finger at France and Germany for not living up to their agreement to release diesel, suggesting, I guess, that they were hoarding it for themselves.
Yesterday on Fox News’ America’s Newsroom, U.S. Energy Secretary Chris Wright told Sandra Smith he thought Europe might be ready to release, giving the impression that diplomacy, or diplomatic pressure, was already in place. Smith pressed him on whether Europe would actually put barrels on the market. Wright’s answer was not a maybe. “Europe can help the situation as well, and I’m highly confident they will,” he said. “This is a time for a coordinated release of diesel stores as we go into harvest season and we go into winter heating oil season. Now’s the time to bring more diesel to the market, and that diesel is available. I think we have some positive news coming.” He also said there is a very good chance we have hit peak prices, that diesel is almost surely headed lower, and that gasoline is quite likely to see meaningful declines as well.
Overnight, that pressure appears to be paying off.  French President Emmanuel Macron said he spoke with President Donald Trump and Canadian Prime Minister Mark Carney on the global energy outlook.  It is being repoted that France whow was accused of being a diesel supply scofflaw is now proposing that European countries release 50 million barrels of diesel and that International Energy Agency members release 50 million barrels of crude oil, according to a source familiar with the discussions.  Now reports say that G7 leaders may hold a call Friday afternoon to discuss next steps, a source familiar with the talks said. France currently holds the G7 presidency.
And it is about time Europe came to the table, because the United States has been battling this out alone. The Energy Report has said the same thing for a long time: this is not a crude problem; it is a diesel problem. The world lost a lot of refineries to shortsighted green-energy madness, Middle East plants have been hit in the Iran war, and Russian refineries have been knocked offline. A string of closures in Europe finished the job. Diesel is what is left short.
Retail diesel is averaging about $6.37 a gallon, off the September 22 record of $6.53 but still roughly 72 percent above a year ago, when it was $3.70. Regular gasoline is about $4.40, down a couple of cents on the day and off last week’s $4.49, but still about $1.24 above a year ago. The diesel crack has been north of $100 a barrel. That is refiners printing money and truckers writing the check. Crude is not the story. WTI is back in the high $80s. The product is.
President Trump says he is “thinking about” a ban on U.S. diesel exports. Energy Secretary Chris Wright is trying to get there without the ban with Europe’s release of about 120 million barrels of diesel from strategic stocks over 180 days, more than a third of the EU’s roughly 315 million barrels. Treasury Secretary Scott Bessent’s line is the right one. American farmers, truckers, and businesses should not carry the burden of a global shortage. EU Trade Commissioner Maros Sefcovic told Fox Business they were shocked by the ban talk and want “coordination and a common approach.” Europe is meeting on a joint response and wants any release run through the IEA, not a bilateral squeeze.
The shortage was built on purpose, then made worse by war. At home, LyondellBasell shut Houston in 2025, about 264,000 barrels a day. Phillips 66 stopped crude runs at Los Angeles later that year, about 139,000. Valero idled Benicia in 2026. Three closures, on the order of half a million barrels a day gone, only partly offset by expansions elsewhere. California took the worst of it. Overseas, Scotland’s Grangemouth closed in 2025, the last refinery in the country, and this week Syngenta put another 377 Grangemouth jobs on the block. Europe has been shutting capacity for years under cost and climate rules, then lost Russian diesel, and now leans on us. U.S. plants are already running in the mid- to high-90s. There is no spare still sitting in the closet.
We export roughly 1.2 to 1.5 million barrels a day of diesel, and in recent months we have supplied more than half of Europe’s diesel imports. Cut that and Europe does not magically find barrels. It bids harder for what is left, and the global price goes up, including the price that comes back to our pump. Wood Mackenzie’s read is that a ban fills Gulf Coast tanks fast, refiners cut crude runs, gasoline imports rise, and the pain moves from diesel to gasoline. A refinery is not a diesel faucet. If they cannot sell the diesel, they run less crude, and you lose gasoline and jet fuel with it. Wright himself has called a blanket ban a blunt tool that does not work.
Europe releasing stocks can buy time. It does not replace a refinery in Houston, a plant on the Gulf, or barrels that cannot get out of the Strait of Hormuz. Stocks are a rainy-day fund. We are trying to spend the rainy-day fund because we shut the factory. You cannot refine your way out of a shortage by trapping the barrels in Texas. A diesel export ban is a boomerang with a price tag. Europe shut the refineries. Now they are shocked we might shut the exports.
The goal is right: lower the price for Americans. The tool matters. Work the European release, keep the export lanes open, and stop pretending a ban creates barrels we already refined and sold. The shortage was made in closed refineries and a war. It will not be fixed with a padlock on the dock. And we will get through this crisis on diesel but only if we get the world to adopt president trump’s energy policy. It’s about time that we face the challenges realistically because energy demand is only going to increase further assuming we want prosperous and growing economy.
And just when you think the Atlantic is going to be quiet all season, FOX Weather is raising the alarm that we have to keep our eyes on the Atlantic. A new storm is brewing, and FOX Weather is watching it. They posted on X that eyes are on the Gulf: tropical signals are flashing in the long-range computer models, putting the Gulf of America under close scrutiny for potential development next week. Stay tuned to FOX Weather for the latest updates as atmospheric conditions align across the basin.
That is the kind of headline natural gas does not want to see this late in the injection season. A Gulf system next week would not have to become a major hurricane to matter. Cooling demand, production shut-ins in the Gulf of America, and a scramble in LNG feedgas can flip a comfortable shoulder-season balance into a tighter one in a hurry, and the market is already heading into winter with less gas in the ground than a year ago.
Yesterday’s EIA report did not scream shortage, but it did not give the bears a free pass either. Working gas in storage rose 64 Bcf for the week ending September 25, right on the consensus, to 3,415 Bcf. That was a bigger build than the prior week’s 53 Bcf and above the 56 Bcf injected in the same week last year, but it still came in below the five-year average injection of about 80 Bcf. Stocks are now 138 Bcf, or 3.9 percent, below last year at this time and 79 Bcf, or 2.4 percent, above the five-year average of 3,336 Bcf. EIA said total working gas remains inside the five-year historical range.
The regional split tells the story. The East and Midwest each added 25 Bcf. The Mountain region added 4 Bcf and the Pacific 3 Bcf. The South Central gained only 7 Bcf, with salt caverns drawing 4 Bcf while nonsalt fields injected 9 Bcf. Salt is already 27.3 percent below a year ago and 15.5 percent below the five-year average, so the flexible storage the market leans on in a weather event is not overflowing.
Early looks at next week’s report point to something in the neighborhood of a 79 Bcf build for the week ending October 2, a touch above last year’s 77 Bcf but still under the five-year average injection near 96 Bcf. If the models that FOX Weather is flagging actually spin something up in the Gulf, those late-season injections get a lot harder to count on, and a storage level already 138 Bcf light versus last year starts to look a little less comfortable heading into the first cold shots of the season.
Good for natural gas you have to keep up with the weather and to keep up with the weather you have to download the Fox weather app at the same time you need to stay tuned to the Fox Business Network because they’re the only network in America that’s truly invested in you and also it’s very important that you sign up for the Phil Flynn daily trade levels to keep up to date on all different futures markets and if you haven’t opened your account you can do so today by calling me at 888-264-5665 or you can e-mail me at pflynn@pricegroup.com make sure everybody has a good weekend.

Thanks,

Phil Flynn

Senior Market Analyst & Author of The Energy Report

Contributor to FOX Business Network

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