Oil prices fell sharply on Friday, extending earlier losses, after reports that governments could release diesel and crude stockpiles to ease concerns over a global supply shortage.

International benchmark Brent crude futures for December delivery dropped 3.1 per cent to $99.13 a barrel, while US West Texas Intermediate futures for November delivery declined 4 per cent to $89.18.

The decline followed a Reuters report that European Union member states were considering a French proposal to release additional diesel reserves after pressure from the Trump administration.

The report, citing a single unnamed source familiar with the discussions, said France had proposed that EU member states release 50 million barrels of diesel, while countries belonging to the International Energy Agency release a further 50 million barrels of crude oil.

EU member states were due to hold crisis talks on Friday over a coordinated response to surging diesel prices, following a call by U.S. Treasury Secretary Scott Bessent for European countries to urgently release part of their fuel reserves.

U.S. President Donald Trump, who has repeatedly raised the possibility of banning diesel exports, appeared to back away from the proposal earlier this week as crude shipments through the strategically important Strait of Hormuz rebounded.

The U.S. accounted for about half of the European Union’s diesel imports in August, according to the International Energy Agency, highlighting the 27-member bloc’s exposure to any potential U.S. export restrictions.

Oil prices had settled higher in the previous session following reports that the U.S. was deploying a third aircraft carrier strike group to the Middle East, alongside an amphibious force carrying about 2,000 Marines.

The deployment has heightened concerns over a possible escalation of the months-long conflict.