The US is pressuring France and Germany to release emergency diesel stocks. It has threatened a diesel export ban if they refuse.
The Trump administration has told Germany and France to draw down their emergency diesel inventories to help ease global fuel prices or face a potential U.S. diesel export ban, according to three people close to the discussions cited by Reuters. The warning marks an escalation of pressure on European allies as President Donald Trump weighs restricting U.S. diesel exports to bring down domestic fuel prices ahead of November’s midterm elections.
A source based in a European capital said the U.S. has asked the European Union to release 120 million barrels of diesel over the next six months, a release that would amount to drawing down more than 40% of the EU’s roughly 39 million metric tons of emergency gasoil and diesel stocks, according to the latest available Eurostat data. Germany and France together hold about 35% of those reserves, roughly 5.6 million and 8.2 million metric tons respectively. U.S. officials have expressed frustration that the two countries have not fully followed through on earlier commitments to release emergency petroleum stocks, and raised the matter with the International Energy Agency. The European Commission, along with Germany, France, Italy, Ireland and Britain, held a call Thursday to discuss whether to release additional diesel stocks.
U.S. diesel prices have climbed to record levels in recent weeks, reaching a national average of $6 per gallon and later $6.50, driven in part by supply disruptions tied to the war between the U.S., Israel and Iran and reduced Russian fuel exports to Europe following the invasion of Ukraine. U.S. Energy Secretary Chris Wright said the administration expects announcements from Europe on new diesel supplies soon, citing lost diesel exports from the Middle East and China as contributing factors. Trump has not ruled out an outright export ban, though he appeared somewhat less inclined toward the move on Wednesday than in prior days; the two possibilities were not discussed when Trump and French President Emmanuel Macron met on the sidelines of the U.N. General Assembly last week, according to an official at the Élysée Palace. Business groups and energy analysts have warned that a U.S. export ban could backfire, potentially raising global diesel prices further and pushing up domestic gasoline and jet fuel costs rather than easing the overall crunch.
This report is based on information from Reuters, Business Recorder, Oilprice.com and CGTN