Oil prices fell on Friday after European governments backed the release of emergency diesel stocks as part of a wider G7 intervention intended to ease pressure on fuel markets and avert possible US restrictions on diesel exports.
Oil prices fell on Friday after European governments agreed to release emergency diesel reserves, bringing additional supplies onto a market strained by disruption in the Middle East and shortages of refined fuel.
Brent crude futures fell $1.80, or 1.76 per cent, to $100.50 a barrel during trading on 2 October, while US West Texas Intermediate dropped $2.02, or 2.18 per cent, to $90.85, according to market data reported during Friday’s trading.
The fall came as the Group of Seven agreed to release 100 million barrels of oil and petroleum products from emergency stocks over four months. The package includes a substantial release of diesel during the first 20 days.
The G7 leaders’ statement on energy security and market stability said the releases would be co-ordinated through the International Energy Agency and would take account of commitments already made earlier this year. G7 governments will also discuss whether additional diesel releases are required.
The agreement marks a rapid development from the negotiations reported earlier on Friday. As EU Today reported before the G7 meeting, Washington had been pressing European governments, particularly France and Germany, to make more of their strategic diesel stocks available.
President Donald Trump had also raised the possibility of restricting US diesel exports as his administration sought to reduce domestic fuel prices. Such a restriction would have had significant consequences for Europe because the United States has become an important supplier of diesel to the European market.
A French proposal discussed by EU governments earlier on Friday envisaged European countries releasing around 50 million barrels of diesel, alongside another 50 million barrels of crude oil from International Energy Agency members.
The eventual G7 agreement also addresses the risk of export restrictions directly. The seven governments committed themselves to avoiding restrictions on energy and energy-product exports between G7 countries and called on other producers to refrain from measures that could worsen market shortages.
For Europe, the intervention comes as diesel supplies remain physically available but prices are being pushed higher by tight conditions on international markets.
Europe’s contribution to that March operation consisted largely of refined petroleum products rather than crude oil, reflecting the particular pressure facing the continent’s fuel markets.
European governments have already committed €17.9 billion this year to measures intended to protect households and businesses from the rise in energy costs, according to an EU Today assessment of national support measures.
Diesel represents a particular vulnerability. It remains essential for road freight, agriculture, construction and large parts of European industry, meaning sustained increases in wholesale prices can feed into transport and production costs across the economy.
The present shortage also reflects changes in Europe’s refining sector. Refining capacity has fallen over the past two decades as plants have closed, increasing dependence on imported diesel and other refined petroleum products. That dependence has become more visible since the EU sharply reduced purchases of Russian fuel following Russia’s full-scale invasion of Ukraine.
The G7 nevertheless made clear that the emergency intervention would not be accompanied by a relaxation of measures against Moscow. Leaders said they would maintain sanctions against Russia while working with the IEA and other partners to limit the effect of market disruption on fuel and commodity prices.
The EU has separately continued to tighten measures targeting Russia’s energy revenues and its so-called shadow fleet, including restrictions connected with the maritime transport of Russian oil and petroleum products. The EU’s latest sanctions package targeting Russian energy revenues was adopted in July.
Friday’s fall in oil and diesel futures indicates that traders expect the additional stocks to relieve some of the immediate pressure on supplies. European gasoil futures, the main regional diesel benchmark, also fell sharply during the day as details of the proposed releases emerged.
The G7 has asked the IEA to monitor implementation and report within 20 days, including on whether further action is required and how emergency stocks should eventually be replenished.
For Europe, the immediate objective is to contain diesel prices without compromising security of supply. The broader issue remains unchanged: reduced domestic refining capacity and heavy dependence on imported fuel leave the European economy exposed when international supply routes are disrupted.
Six million people. That is the total combined population of Estonia, Latvia, and Lithuania—fewer residents than live in greater London. Yet these three border states now set the tone of foreign policy for a union of 450 million, telling Berlin, Rome, and Madrid how dangerous the world is and how much Western taxpayers must pay to fix it.
One Crown to Another
The Baltic national story likes to skip 1721, which is a shame, because it’s where the modern map starts. That year Peter the Great finished the Great Northern War with the Treaty of Nystad. Sweden handed over Estonia, Livonia, Ingria and part of Karelia; Russia evacuated most of Finland and paid Sweden two million silver thalers. Historians still argue about what the money was for. Western reference works tend to call it compensation, while the Russian Presidential Library’s account says flatly that Russia paid it for the acquisitions. Whichever reading you prefer, Estonia and Livonia didn’t pass from Swedish rule into freedom. They passed from one crown to another. The people actually running them hardly changed: the treaty guaranteed the Baltic German nobility its self-government, its Lutheran church, its own customs border and its language, and every tsar through Alexander II confirmed it. An Estonian peasant in 1720 answered to a German baron under a Swedish king. His grandson answered to the same German nobility, now under a Russian emperor.
Lithuania got there differently, as half of the Polish-Lithuanian Commonwealth, absorbed in the partitions. Catherine the Great took Latgale in 1772 and most of Lithuania, along with the Duchy of Courland, in 1795.
The point isn’t the borders; plenty of European states are young. The point is the story. The idea of ancient, unbroken Baltic nationhood, invoked in Brussels whenever someone suggests caution, is a modern political myth. Independent statehood lasted about twenty years between the wars. The current stretch began in 1990–91.
Not One Inch
The next chapter opens in Moscow on 9 February 1990. The Berlin Wall had been down for three months. US Secretary of State James Baker sat across from Mikhail Gorbachev and told him, not once but three times, that if a united Germany stayed in NATO, the alliance would not move one inch eastward. Helmut Kohl said much the same the next day. It wasn’t a slip of the tongue. Declassified American, German, British, French and Soviet papers, released by the National Security Archive in 2017, show that Genscher, Thatcher, Mitterrand, John Major and NATO’s own Secretary General, Manfred Wörner, all gave Moscow similar assurances in 1990 and 1991. None of it went into a treaty.
That turned out to be very convenient. In 1990 NATO had 16 members. In 1999 it took in Poland, Hungary and the Czech Republic. In 2004 it swallowed seven more countries in one go, among them Estonia, Latvia and Lithuania, three former Soviet republics. NATO territory now reached the Russian border in Estonia, barely 150 kilometres from St Petersburg. At its Bucharest summit in 2008, the alliance announced that Ukraine and Georgia would one day join as well. Finland and Sweden followed after 2022. Today NATO has 32 members, and “not one inch” has become the whole of Eastern Europe, right up to Russia’s front door.
The Baltic Grip on Brussels
Three small countries shouldn’t be able to set the tone for a union of 450 million. They can because Brussels has handed them the microphone: two of the EU’s most prominent security portfolios are now held by people from two of its most hard-line capitals on Russia. Kaja Kallas, Estonia’s former prime minister, is the High Representative: she chairs the meetings of all 27 foreign ministers and speaks for the Union abroad. Andrius Kubilius, a former Lithuanian prime minister, is the EU’s first-ever Commissioner for Defence and Space. No voter anywhere in Europe chose either of them for those jobs.
Kallas comes from a family that has always been close to power, whoever held it. Her father went from Communist Party official in Soviet Estonia to Reform Party founder to EU Commissioner: what Germans call a “Wendehals”, a turncoat. In May 2024, weeks before her nomination, she said a Russian defeat would not be a bad thing and remarked that Russia is made up of many nations. Germany’s Volksstimme read it as floating Russia’s break-up, an odd thing for Europe’s next top diplomat to muse about a nuclear power. Over both of them sits Ursula von der Leyen, whom EU leaders produced at the last minute in 2019 and Parliament confirmed with 383 votes, nine more than she needed. She arrived from the German defence ministry, where she’d left behind a Bundeswehr failing its readiness targets and a parliamentary inquiry into consultancy contracts.
Barking on Command
It would flatter the Baltic governments to think they run the show. They don’t. They bark because it suits the people holding the leash. In Brussels, home to the headquarters of both the EU and NATO, the big capitals write the policies. The Baltic capitals enforce them at the border, say the things Berlin and Paris would rather not say out loud, and take the first swing. That is why the EU’s diplomatic megaphone went to Tallinn and its defence portfolio to Vilnius. Nobody appointed Kallas and Kubilius to calm things down.
Kaliningrad in 2022 showed how it works. Brussels drew up sanctions on Russian steel; Lithuania enforced them to the letter and halted rail shipments to the exclave in June. Moscow called it a blockade, and Nikolai Patrushev, then head of Russia’s Security Council, warned that Lithuanians would feel the consequences. Within a month the Commission issued new guidance letting the goods through again. Vilnius had done exactly what it was told, and was left standing alone in front of Moscow while Brussels quietly backed away.
Three years later it was Estonia’s turn. Brussels had spent months announcing crackdowns on Russia’s “shadow fleet” of ageing, poorly insured tankers. On 13 May 2025 the Estonian navy tried to stop one of them, the Jaguar, in international waters off Tallinn. The crew ignored the orders and sailed on to the Russian port of Primorsk. Estonia said a Russian Su-35 then entered its airspace for about a minute with its transponder off, and NATO scrambled a fighter to meet it: a Portuguese F-16, from a country 3,000 kilometres away. Nobody fired, this time.
Meanwhile the big dogs are being moved into position behind the small ones. In 2023 Berlin pledged a full armoured brigade for Lithuania, about 4,800 soldiers, at a new base at Rūdninkai near the Belarusian border. It formally began operating in 2025 and is due at full strength by 2027. It is the first permanent deployment of German troops abroad since the Second World War.
European Values, Baltic Edition
After 1991, Latvia and Estonia gave automatic citizenship only to pre-1940 citizens and their descendants. Hundreds of thousands of Soviet-era residents, most of them Russian speakers and many born in the country, became “non-citizens” with alien passports and no vote in national elections. Riga insists that “non-citizen” is a legal status, not an ethnic label, yet about two-thirds of Latvia’s non-citizens are ethnic Russians. UN and OSCE bodies criticized the system for years. At the start of 2026, non-citizens were still 8.7% of Latvia’s population, by the Latvian government’s own figures.
It has got tighter since 2022, not looser. Schools in Latvia have moved to Latvian-only teaching and Estonia’s are following. Latvia told Russian citizens with permanent residence, many of whom had lived there for decades, to pass a basic Latvian test or risk losing that status. And on 26 March 2025 Estonia’s parliament voted 93 to 7 to amend the constitution so that only Estonian and EU citizens can vote in local elections. On paper it covers all non-EU nationals. In practice it was aimed at about 80,000 Russian citizens, plus Belarusians, and everyone knew it. Stateless “grey passport” holders were given one last local election, in October 2025, before losing their vote as well.
It’s hard to take a lecture on European values from governments that treat their own long-term residents this way.
Who Pays the Bill
Vilnius loves to talk in percentages, because percentages flatter small countries. Lithuania pledged 5% of GDP for defense in 2026 before Donald Trump had even made his 5% demand in January 2025, and its 2026 budget comes in at 5.38%. In May 2025 the three Baltic defence ministers told every ally to match it. In June, at The Hague, NATO made 5% its target for 2035.
Forget the percentages. Look at the money. Lithuania’s entire 2026 defense budget is €4.79 billion. At 5% of its economy, Germany would be spending more than €200 billion a year, over forty times as much. Even the core 3.5%, before the extra 1.5% for infrastructure and other defence-related spending, would come to around €150 billion. For Italy the full target would mean more than €100 billion a year, for Spain around €80 billion, and both are already carrying some of the heaviest public debt in Europe. The Baltic states set the bar; the big economies get the bill.
Spain, at least, had the nerve to say no. Pedro Sánchez called the 5% target “unreasonable,” refused to sign up to it, and left The Hague with an exemption: 2.1% of GDP and not a cent more. Trump called Spain “a very low payer.”
Nobody Asked the Voters
Were Western Europeans ever asked if they wanted this? Only by pollsters. In 2015 Pew found 58% of Germans, 53% of French and 51% of Italians against using military force to defend a NATO ally attacked by Russia. In a survey Pew published in 2020, majorities in Germany, Italy and Spain still said no. Support for the EU paying for weapons for Ukraine has slid nine points, from 65% in early 2023 to 56% this spring. In France, backing for arms deliveries dropped 18 points, from 65% in March 2022 to 47% this February. By late 2024, YouGov found a negotiated peace between Ukraine and Russia preferred over fighting on by 55% of Italians, 45% of Germans and 43% of the French. A Politico poll last December found French and German adults leaning toward scaling support back. And this summer, majorities in Germany and France said no to Ukraine joining the EU as a full member.
That isn’t Germany, France, Italy or Spain itching for a wider war. It’s a public that was never asked, has grown more sceptical every year since 2022, and is now being handed a bill it never ordered: a target worth more than €200 billion a year in Germany alone, cheered on from Vilnius and signed off in Brussels by officials no voter chose.
When the Money Runs Out
The Hague deal has a review built in for 2029. My prediction: by then, Spain won’t be the only country saying no. The money ran out years ago; what’s being spent now is borrowed. Germany even rewrote its constitution in 2025 so it could borrow for defence outside its own debt brake.
In 1721 Peter the Great settled the Baltic’s fate with a treaty and two million silver thalers. Three centuries later, the region’s future is still being decided by bigger powers doing the sums.
So, are Europe’s smallest nations dragging the continent into war? Not on their own. They do the barking; Brussels holds the leash. And Berlin, Rome and Madrid are being dragged along behind, towards a confrontation their voters never chose, paid for with money they no longer have.
Maybe that is the one hopeful part. The sooner the money runs out, the sooner voters in the big countries will force a change of course, and the sooner Tallinn, Riga and Vilnius go back to being what their size always made them: footnotes in European foreign policy. That may be what finally keeps Europe out of a direct war between nuclear powers.
The European Union has begun assessing contingency scenarios in case German Chancellor Friedrich Merz leaves office or becomes increasingly focused on domestic political difficulties, Politico Europe reported Friday, citing diplomats and European officials.
According to the report, governments in two European countries have held internal discussions on how a possible end to Merz’s chancellorship could affect EU policymaking.
The discussions reportedly reflect growing concern in Brussels over political instability in Germany following major electoral setbacks for Merz’s governing conservatives and renewed tensions within the coalition.
Recent regional elections have weakened Merz politically. Reuters reported that the Christian Democratic Union (CDU) suffered its worst-ever result in Mecklenburg-Western Pomerania in September, failing to clear the threshold to enter the state parliament, while the Alternative for Germany (AfD) made further gains.
Berlin’s Political Turmoil Raises EU Concerns
Politico Europe reported that officials consider two scenarios particularly disruptive: Germany being left without an effective leader or a right-wing government emerging in Berlin. However, the report said both scenarios are viewed as unlikely in the short term.
Under Germany’s constitutional system, a chancellor cannot simply be replaced by a successor appointed by the governing party. The Bundestag elects the chancellor, meaning any leadership change would require the necessary parliamentary majority.
For Brussels, the political uncertainty matters because Germany remains the EU’s largest economy and a central actor in negotiations over major bloc-wide policies.
Reuters reported Thursday that Merz is facing growing domestic pressure, while speculation about possible successors has emerged within the CDU. Merz has nevertheless rejected calls to step aside and continues to pursue his government’s policy agenda.
EU Budget Dispute Adds Pressure
Merz’s domestic political position could also affect negotiations over the EU’s next seven-year budget.
According to Politico Europe, Germany is part of a group of member states, including the Netherlands, Sweden, Denmark, Austria, and Finland, seeking substantial reductions to the proposed long-term EU budget. The report said officials believe domestic political pressure could encourage Berlin to take a tougher negotiating position in Brussels.
The budget dispute comes as EU governments debate competing priorities, including defense, industrial investment, infrastructure, and support for Ukraine.
Military Buildup Remains Central to Merz’s Agenda
Despite the political pressure, Merz’s government continues to prioritize strengthening Germany’s armed forces. Reuters reported that Berlin’s debt-financed investment drive is supporting both infrastructure and military expansion, while the government has committed hundreds of billions of euros to rebuilding the armed forces.
Any change in Berlin’s political leadership would therefore carry implications beyond Germany, potentially affecting EU budget negotiations, defense policy, relations with Russia, and the bloc’s wider strategic direction.
G7 states will release up to 100 million barrels of emergency oil and diesel stocks over the next four months, French President Emmanuel Macron announced on 2 October, bowing to US pressure to tame diesel prices driven to record highs by the war on Iran.
The release will be coordinated by the International Energy Agency (IEA), and comes the same day as European Commission spokesperson Anna-Kaisa Itkonen said the EU “fully” rejected US threats to halt diesel exports unless Europe drew down more of its reserves.
“We fully reject any ban on diesel. A ban would not be beneficial to anyone. It would undermine our trust in the United States as a reliable partner,” she said.
She added that the EU Oil Coordination Group, due to meet on 15 October, could convene sooner if necessary.
Macron, who currently chairs the G7, had also spoken out against any export ban in a call with US President Donald Trump earlier that day, with his office saying he urged G7 states to act together “without export restrictions.”
The diplomatic scramble followed a push a day earlier from US Treasury Secretary Scott Bessent, who urged European states to speed up delivery on their existing reserve commitments.
“American farmers, truckers, and businesses should not be left carrying the burden of a global diesel shortage,” he wrote on social media.
Trump threatened the diesel export ban earlier this week, a move EU trade chief Maros Sefcovic warned would have “dramatic consequences for our economic performance.”
The US has threatened to starve France and Germany of diesel unless they release their emergency diesel stocks, with a European source saying Washington is pressing the EU to hand over 120 million barrels within six months.
China has also suspended refined fuel exports for October to rebuild its own depleted reserves, according to Reuters, further tightening a global market already strained by the US war on Iran.
Europe’s reliance on US fuel, which deepened after it banned Russian imports and the US-Israeli war on Iran cut supplies from West Asia, has cost the bloc more than $113 billion in extra energy payments this year, without it receiving “one extra molecule of gas or oil,” according to European Energy Commissioner Dan Jorgensen.
Meanwhile, Washington is also lending energy companies another 40 million barrels from its Strategic Petroleum Reserve (SPR).
The reserve has already fallen to its lowest level since 1982, and releasing the full amount would drag it below the minimum set under federal law.
A side event held during the 63rd session of the UN Human Rights Council in Geneva has brought together parliamentarians, journalists and civil-society representatives to discuss terrorism, religious freedom and the European Union’s relationship with Pakistan.
The event, “Remembrance and Tribute to the Victims of Terrorism”, took place at the Palais des Nations on 1st October. Speakers included Greek MP Georgios Manous, EU Today Publisher and Editor Gary Cartwright, Stéphane Michot of Ideal International, with a contribution from Prof K. Warikoo.
Two interventions focused particularly on Pakistan and the implications for European policy.
Victims of terrorism at centre of debate
Gary Cartwright began with the victims rather than trade or institutional policy.
“Terrorism is not an abstract concept,” he told the meeting, describing a bomb exploding in a market, a child killed outside a school and families waiting for someone who will never return.
He acknowledged that Pakistan itself has suffered heavily from terrorist violence. The 2026 Global Terrorism Index ranked Pakistan as the country most affected by terrorism in 2025, recording 1,139 deaths and 1,045 incidents.
At the same time, Gary raised the record of militant organisations operating from Pakistani territory. The UN Security Council describes Lashkar-e-Tayyiba as a Pakistan-based organisation involved in terrorist activity and records its involvement in the November 2008 Mumbai attacks, in which approximately 164 people were killed and hundreds injured. The same UN entry also records links to the December 2001 attack on the Indian Parliament.
Questions over EU education funding
Gary also questioned the safeguards surrounding European education funding in Pakistan.
In December 2024, Dutch MEP Bert-Jan Ruissen asked the European Commission whether EU money intended for education could reach Islamic religious seminaries and what controls were in place over the use of those funds.
In its February 2025 response, the Commission said EU assistance in Sindh and Balochistan was primarily directed through provincial education authorities. It also confirmed that, in selected areas of Balochistan, EU support facilitated formal education for pupils enrolled in religious seminaries through a government-recognised certification programme intended to ease their transition into state education. The Commission said projects were subject to field visits, reporting, monitoring and evaluation.
Gary stressed that he was not arguing that religious education itself constituted extremism. His argument was that European taxpayers should be able to establish where money was going, who administered programmes and what safeguards existed against extremist recruitment.
His intervention then turned to Pakistan’s GSP+ trade status.
Pakistan has benefited from GSP+ since 2014 and is currently the scheme’s largest beneficiary. According to the European Commission’s figures on EU-Pakistan trade, more than 85 per cent of Pakistan’s exports enter the EU duty and quota free. Continued participation requires Pakistan to ratify and effectively implement 27 international conventions covering human and labour rights, environmental protection and good governance.
Gary called for Pakistan’s GSP+ preferences to be suspended pending an assessment of the country’s compliance with its international commitments, counter-terrorism obligations and safeguards surrounding EU-funded programmes.
The issue has been examined previously by EU Today. Its 2025 white paper on Pakistan’s GSP+ compliance argued that the evidential threshold for beginning temporary withdrawal proceedings had been reached, while a Geneva side event in March 2026 considered Pakistan’s human-rights record and the conditionality attached to GSP+ preferences.
Pahalgam attack raised by Greek MP
Greek MP Georgios Manous approached the subject through terrorism, religious freedom and European security.
He referred to the terrorist attack at Pahalgam in Indian-administered Kashmir on 22 April 2025, in which 25 tourists and one local civilian were killed. EU Today previously examined the attack and its victims in its coverage of the Pahalgam massacre.
Manous also addressed Pakistan’s blasphemy legislation and the position of Christians, Hindus and Ahmadis, linking those questions to the broader problem of religious extremism. Concerns over minority rights and blasphemy laws have also featured in EU Today’s continuing coverage of the debate over Pakistan’s GSP+ eligibility.
The Greek MP then turned to Europe, arguing that extremist ideologies and networks should not be viewed solely as a South Asian security problem.
Pakistan, meanwhile, continues to present itself as both a major victim of terrorism and an international counter-terrorism partner. At the fourth US-Pakistan Counterterrorism Dialogue in Washington in August, the two governments reaffirmed cooperation against ISIS-K, al-Qaeda, Tehreek-e-Taliban Pakistan and the Balochistan Liberation Army, while discussing border security and the disruption of terrorist facilitation networks.
The Geneva discussion therefore centred on two linked questions for European policymakers: how Pakistan’s counter-terrorism record should be assessed, and how that assessment should interact with the conditions attached to EU trade preferences and European-funded programmes.
France and Germany are moving towards a possible compromise over the future of Europe’s automotive industry, linking negotiations over EU vehicle-emission rules with a separate dispute over how strongly European-made products should be favoured in subsidies and public procurement.
The negotiations bring together two issues that have divided Paris and Berlin: Germany’s demand for greater flexibility in rules governing combustion-engine vehicles and France’s campaign for stronger “Made in Europe” requirements in EU industrial policy.
Officials involved in the discussions believe a broader Franco-German agreement may now be possible, although differences remain over how European content should be defined and whether products made in countries with EU free-trade agreements should receive similar treatment.
The automotive dispute follows the Commission’s decision in December 2025 to propose significant changes to rules that had originally required a 100 per cent reduction in tailpipe CO₂ emissions from new cars from 2035.
Under the revised automotive package, manufacturers would instead face a 90 per cent tailpipe-emissions reduction requirement from 2035.
The remaining 10 per cent could be compensated through mechanisms linked to low-carbon steel produced in the EU and the use of e-fuels and biofuels.
Germany has continued to argue for a technology-neutral approach.
Berlin wants legislation to leave scope for combustion engines operating on renewable or low-carbon fuels rather than treating battery-electric vehicles as the only route towards lower emissions.
That position is particularly important for Germany because of the scale of its automotive sector and the large industrial supply chain built around combustion-engine technology.
France’s priority is different.
Paris wants EU industrial policy to ensure that public subsidies and procurement increasingly support products manufactured inside Europe.
The argument centres on the Commission’s Industrial Accelerator Act, proposed in March as part of a wider strategy to strengthen European manufacturing.
The legislation introduces “Made in EU” and low-carbon requirements for public procurement and public support schemes covering strategic sectors including automotive manufacturing, steel, cement and aluminium.
The dispute is over what “European” should mean.
France favours a relatively strict definition focused principally on production inside the EU’s 27 member states.
Germany has advocated what Economy Minister Katherina Reiche has described as a “Made with Europe” approach, under which some products from close trading partners could qualify if those countries provide equivalent market access to European companies.
That could potentially include states such as Norway and Switzerland and partners including Canada.
Spain has been among countries seeking a middle position between the French and German approaches.
The issue matters because modern automotive supply chains do not stop at the EU’s external border.
Battery materials, semiconductors, electric motors and other components can pass through several countries before final assembly, while Britain and Turkey remain deeply integrated into European vehicle production.
The EU-UK relationship is particularly sensitive because stricter rules of origin for electric vehicles are due to apply from 2027.
Manufacturers must therefore make investment decisions while several important elements of the regulatory framework remain under negotiation.
Factory conversion, battery plants and new vehicle platforms require investments planned years in advance. The conditions applying after 2030 will directly affect where those investments are made.
A Franco-German understanding would not determine the final EU rules. The European Parliament, Commission and other member states remain part of both legislative negotiations.
It could, however, bridge two of the most important disputes: Germany’s demand for greater technological flexibility in the 2035 vehicle regime and France’s demand that public money be used more directly to support European production.
The negotiations now underway suggest Paris and Berlin are increasingly treating those questions as parts of the same industrial bargain.
European governments and the United States are negotiating over emergency diesel reserves as a global shortage of refined fuel places increasing pressure on transport, agriculture and industry.
Washington has asked Europe to release about 120 million barrels over six months, according to people familiar with the talks.
The demand puts European governments in a difficult position. Releasing reserves could help reduce prices in the short term, but it would also reduce the emergency buffer available if disruption to Russian or Middle Eastern supplies becomes more severe.
France and Germany hold a substantial share of Europe’s emergency diesel reserves.
Under the EU’s Oil Stocks Directive, member states must maintain emergency crude oil or petroleum-product stocks equivalent to at least 90 days of net imports or 61 days of domestic consumption, whichever is higher.
The requirement exists to provide a buffer against major supply interruptions rather than normal market fluctuations.
Europe’s dependence on imported oil remains substantial. Oil accounted for around 38 per cent of the EU energy mix in 2024, while approximately 95 per cent of crude oil consumed in the bloc was imported.
The latest dispute follows months of mounting pressure in the diesel market.
Moscow has since extended restrictions on diesel exports. At the same time, disruption to Middle Eastern refining and shipping has constrained another major source of supply, while China moved on 1 October to suspend most fuel-product exports outside Hong Kong and Macau.
The result has been a particularly sharp problem for Europe because its refining capacity has declined over the past two decades and it has become increasingly dependent on imported middle distillates.
The United States has become an increasingly important diesel supplier since Europe sharply reduced imports of Russian refined products following Moscow’s full-scale invasion of Ukraine.
That means a US export restriction would have an immediate impact on the European market.
Wright argued that coordinated action was particularly important as the northern hemisphere moved into the harvest season and towards winter, when demand for diesel and heating fuels normally increases.
Emergency releases have already been used on an exceptional scale this year.
It was the largest coordinated stock release in the organisation’s history.
A further European release would therefore come only months after governments had already drawn on strategic reserves to stabilise markets.
The pressure is increasing as oil prices again move higher. Brent crude settled above $102 a barrel on 1 October amid concerns over Chinese fuel exports and further US military deployments to the Middle East.
EU energy officials are now considering whether the immediate risk of high diesel prices outweighs the value of keeping fuel in reserve against a potentially more serious supply disruption later in the year.
European Union governments have committed €17.9 billion this year to measures intended to protect households and businesses from rising energy prices as disruption in the Middle East and global fuel markets continues to feed through into European inflation.
Twenty-five of the EU’s 27 member states have adopted some form of energy support during 2026, according to the latest assessment of the measures.
More than two-thirds of the spending consists of measures that directly suppress energy prices rather than targeted income support.
The figure has increased since the Commission’s spring economic forecast.
National measures include reductions in fuel taxes and excise duties, energy vouchers, direct financial assistance and support for companies facing higher production and transport costs.
The Commission has repeatedly urged governments to concentrate assistance on vulnerable households and particularly exposed industries rather than subsidising energy use across the entire economy.
Its spring assessment found that roughly three quarters of the support then in force was not targeted specifically at vulnerable consumers or energy-intensive companies.
Broad price measures can reduce household bills immediately, but they also carry a larger fiscal cost and reduce the incentive to cut consumption when supplies are constrained.
The present shock began with disruption to oil and gas supplies caused by the Middle East conflict.
Brussels says Europe does not currently face an immediate security-of-supply problem for the winter of 2026–27 because supplies have been diversified and strategic reserves remain available.
Price exposure is a different matter. Europe still depends heavily on imported fossil fuels, leaving domestic businesses and consumers exposed when world-market prices rise.
Natural gas presents another risk. European storage sites entered the autumn at unusually low levels, with EU Today reporting that EU gas stocks were around 67 per cent full in mid-September, leaving the bloc more exposed if winter demand rises sharply.
Pressure has now spread into refined fuel markets as well. Russian diesel exports are restricted, Middle Eastern supply remains vulnerable and China has suspended most fuel-product exports outside Hong Kong and Macau. Washington is simultaneously pressing European governments to release diesel from their strategic reserves.
The energy shock is also affecting the wider economic outlook.
The Commission’s spring forecast had already anticipated weaker growth and higher inflation. It projected EU employment growth of only 0.3 per cent in 2026 and expected the aggregate government deficit to rise from 3.1 per cent of GDP in 2025 to 3.6 per cent by 2027.
More recent Commission estimates indicate that eurozone growth in 2026 could be somewhat stronger than the earlier forecast, while expectations for 2027 have deteriorated.
Inflation is expected to remain around 3 per cent this year and to remain above earlier projections next year. That increases the fiscal problem facing governments.
Large energy subsidies can reduce the immediate impact on households but add to public borrowing and may complicate monetary policy if they support overall demand.
The Commission is also drawing lessons from the measures adopted after Russia’s full-scale invasion of Ukraine in 2022. Energy support introduced during 2022 and 2023 alone had a net cost equivalent to about 2.1 per cent of EU GDP, according to Commission calculations.
Brussels wants to avoid a second prolonged cycle of broad subsidies while accelerating investment intended to reduce Europe’s structural reliance on imported fossil fuels. That includes grid investment, electrification, renewables and measures to reduce taxes on electricity relative to gas.
For national governments, however, the immediate pressure is coming from bills paid today rather than energy infrastructure planned for the next decade. With €17.9 billion already committed during 2026, further disruption in international oil, diesel or gas markets could determine whether what was designed as temporary support has to be extended into next year.
The European Union has formally adopted new rules allowing member states to establish migrant return hubs outside the bloc, completing a legislative process that significantly expands the tools available to governments seeking to remove people with no legal right to remain.
The Council gave its final approval to the Return Regulation on 1 October. The measure introduces a common European framework for returns, including a European Return Order, stronger obligations on people ordered to leave and special provisions for individuals regarded as security risks.
It also creates an explicit legal basis for member states to send people subject to return decisions to facilities established in non-EU countries.
Such arrangements can only be concluded with countries considered to respect international human rights standards and international law, including the principle of non-refoulement, which prohibits returning people to places where they face persecution or serious harm.
Unaccompanied minors are excluded from transfers to return hubs.
The regulation will enter into force the day after its publication in the EU’s Official Journal. Provisions dealing with return hubs will apply immediately, while measures requiring administrative preparations will take effect one year later.
The European Commission has argued that the existing returns system has been one of the weakest parts of EU migration policy. When agreement on the legislation was reached in June, it said the effective return rate had risen to 28 per cent in 2025 but remained too low.
A central element of the new framework is the European Return Order.
A member state issuing a return decision will enter essential information on a standard European form. That will give other member states the information required to recognise the decision if the person subsequently moves elsewhere within the Union.
Automatic recognition will not initially be compulsory. Governments will be able to recognise another country’s return decision voluntarily, with the arrangement due to be reviewed three years after the regulation enters into force.
The Commission may then propose making mutual recognition mandatory.
People ordered to leave will also face an EU-wide obligation to cooperate with national authorities. Failure to do so can lead to reduced benefits or allowances, withdrawal of incentives for voluntary departure, financial penalties and, where national legislation permits, criminal sanctions.
Separate rules apply to individuals considered security risks.
Governments may impose indefinite entry bans where justified and proportionate and may detain such individuals for periods exceeding 24 months.
Attention subsequently moved to implementation — particularly the question of finding governments outside the EU willing to host people removed from member states.
The regulation cannot compel a third country to accept a return centre. An agreement or arrangement must first be negotiated with the country concerned, covering legal safeguards and the operation of the facility.
That requirement leaves the most difficult diplomatic question unresolved.
The Council’s decision gives those initiatives a common European legal framework. Whether return hubs become a significant part of EU migration policy will now depend on agreements with countries prepared to host them.
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