US Energy Secretary Chris Wright said on Thursday that he is “very confident” that Europe will release part of emergency diesel stocks to help mitigate the sharp rise in global fuel prices, at a time when European Union countries are preparing to meet with the European Commission to discuss a coordinated response to rising prices.
Wright added in statements to Fox News: “Europe can also help in the situation, and I am very confident that it will,” calling for a coordinated release of diesel stocks with the entry of the harvest season and the winter heating season. He said that the fuel is available and more of it can be put on the market.
“I think we have some positive news coming,” he added.
For his part, US Treasury Secretary Scott Besent said that Europe must make more diesel available on the market “immediately,” in the latest pressure from Washington on its European allies to contribute to alleviating the scarcity of fuel supplies and rising prices.
These statements come after the administration of US President Donald Trump informed Germany and France of the need to withdraw from their emergency stocks of diesel to help reduce global prices, or face the possibility of imposing US restrictions on diesel exports, according to three people familiar with the discussions.
European meeting Friday
In Brussels, a European Commission spokesman said that European Union countries will meet with the Commission on Friday to discuss a coordinated response to rising fuel prices.
Earlier Thursday, European Union Trade Commissioner Maroš Šefčović described any potential US ban on diesel exports as “unexpected” for the Europeans, warning of major economic repercussions of such a step.
Crisis beyond raw
The American and European move comes at a time when oil product markets are facing an increasing shortage, despite improved crude flows from some regions of the Gulf.
Refining capacities in the region and Russia were damaged, while continued shipping disruptions and a decline in exports from some producers led to a tightening of the diesel market, on which the transportation, agriculture, industry, and heating sectors depend.
The onset of the harvest season in the United States and the winter heating season in Europe also increases the market's sensitivity to diesel availability, which explains Washington's focus on releasing emergency stocks rather than waiting for new supplies to increase.
The Director General of the International Monetary Fund, Kristalina Georgieva, praised the strength of the economies of the Gulf Cooperation Council countries and their ability to contain the repercussions of the war in the region, stressing that this flexibility is based on the strength of financial and economic foundations, the abundance of financial and external margins, the strength of the banking sector, and strategic investments in energy, logistics services, and economic diversification. In the same context, the Secretary-General of the Gulf Cooperation Council, Jassim Mohammed Al-Budaiwi, stressed the importance of deepening Gulf economic integration and strengthening supply chains and commercial and logistical corridors to raise the region’s ability to absorb external shocks.
Georgieva added, during the joint meeting of finance ministers and central bank governors of the Gulf Cooperation Council countries, in Manama on Thursday, which was chaired by the Bahraini Minister of Finance and National Economy, Sheikh Salman bin Khalifa Al Khalifa, that the energy supply shock resulting from the war in the region was contained seven months after its outbreak, noting that the Gulf countries moved quickly to redirect vital supplies away from the Strait of Hormuz, which preserved the flow of energy to global markets and avoided a greater shock to the global economy.
She explained that the increase in new supplies, the withdrawal of stocks, and the decline in demand also contributed to enhancing this adaptation, stressing that the flexibility of the GCC economies is “not a coincidence,” but rather the result of reforms that contributed to building strong economic fundamentals, comfortable financial and external margins, and reliable policy frameworks.
Georgieva pointed out the continued role of exchange rate peg systems in supporting stability and confidence, in addition to the banking sector enjoying high levels of capital and liquidity, while strategic investments in energy infrastructure and logistics services contributed to mitigating the impact of the supply shock.
Contraction in 2026 and recovery in 2027
But she pointed out that the repercussions of the war are still significant, as the near-closure in the Strait of Hormuz and the turmoil in the Red Sea led to a reduction in oil and gas exports, while the damage to energy facilities led to a reduction in production capacity, while non-oil activity was affected by a decline in trade, weak corporate confidence, and high commodity prices.
She said that expectations indicate a contraction in the GCC economy in 2026, with a sharp decline in fuel production and a noticeable slowdown in the growth of non-oil activities, while a strong recovery is expected in 2027, provided that there is a gradual normalization in freight traffic.
On the other hand, she warned that the state of uncertainty is still high, and that the prospects for the Gulf economy will depend on the duration, severity, and geographical scope of the conflict, explaining that the continuation or escalation of unrest may delay recovery, put pressure on the level of investor confidence, and make diversification and job creation efforts more difficult.
The “land bridge” and the railway
Georgieva called on the Gulf countries to continue reforms that raise productivity and enhance the ability of their economies to confront future shocks, while maintaining economic and financial stability and supporting the path of diversification.
On the financial side, it recommended that financial policies work to mitigate the impact of demand shocks in non-oil sectors, and that any aid to families and companies be temporary, targeted and transparent, with a clear date for its end set.
She warned that broad financial stimulus, if the main problem was a result of supply disruptions, could lead to increased inflationary and external pressures, calling, as conditions return to normal, for rebuilding financial reserves and directing the available space towards vital public investments linked to diversification and economic security.
Regarding trade, she said that recent unrest had shown that financial reserves, while important, could not replace physical capacity to withstand trade shocks.
She noted that increasing storage capacities and inventories of basic commodities provides low-cost protection against short disruptions, while longer disruptions require safe infrastructure to redirect trade, supported by logistical readiness.
She said that the Fund's analyzes show that completing the GCC railway and the Saudi land bridge would significantly reduce the economic losses resulting from the closure of the Strait of Hormuz, adding that the Fund's estimates indicate the ability of these two routes to raise Gulf output even if the Strait remains open.
Diversification, the private sector and artificial intelligence
Georgieva stressed that the war reaffirmed the importance of economic transformation agendas in the countries of the region, noting that the expansion of the non-oil sector in Bahrain, Saudi Arabia, and the UAE helped mitigate the severity of the shock.
The GCC countries called for continuing reforms regardless of oil price levels, with a focus on expanding the role of the private sector, improving the business environment, aligning skills with the needs of the labor market, and benefiting from digitization and artificial intelligence.
She also pointed to the growing importance of digital assets in the GCC countries, explaining that the total activity on blockchains rose, according to the Fund’s estimates, from about $6 billion in 2020 to $92 billion in 2024.
She said that this development provides benefits that include efficient payments, innovation in capital markets, and enhancing the Gulf’s role in global finance, but in return it imposes economic, financial, operational and regulatory challenges, which require strong legal, regulatory and supervisory frameworks, in addition to improving data collection and monitoring and enhancing international cooperation.
Secretary General of “Cooperation”: Promoting economic integration
For his part, the Secretary-General of the Gulf Cooperation Council, Jassim Mohammed Al-Budaiwi, said that the region faces a very complex economic and geopolitical environment, after the disturbances that affected energy production, shipping movement, logistics services, and trade demonstrated the rapid transmission of geopolitical developments to global economies and markets.
He pointed out that the economies of the GCC countries have demonstrated strong financial and macroeconomic resilience, attributing this to years of economic and financial policies, the strength of financial centers, the strength of banking systems, and strategic investments in infrastructure, interconnection, and economic diversification.
He stressed that the immediate priority is to maintain economic and financial stability, while keeping policies flexible and able to respond to rapid developments, stressing that dealing with geopolitical shocks should not be limited to managing their direct repercussions, but rather must include consolidating economic flexibility in the long term.
The Secretary-General called for accelerating efforts to enhance Gulf economic integration, facilitating the movement of goods, services, capital and citizens, strengthening regional supply chains, and developing more flexible and diversified trade and logistics corridors.
He also stressed the importance of continuing structural reforms that enhance the role of the private sector, raise competitiveness, encourage innovation and digital transformation, and contribute to accelerating the transition to more diversified and knowledge-based economies.
Al-Budaiwi said that deepening the integration between the GCC countries’ markets, infrastructure, financial systems and supply chains enhances their collective ability to absorb external shocks and transform challenges into opportunities for sustainable growth.
He stressed the Gulf Cooperation Council's commitment to continuing policy coordination and deepening economic integration and transformation, in a way that strengthens the foundations of the GCC economies and supports achieving sustainable prosperity.
