The Trump administration is pressing European governments to immediately release diesel from their strategic reserves as soaring fuel prices threaten economies on both sides of the Atlantic, with European Union countries set to meet Friday to consider a coordinated response to the worsening energy crunch.
Washington has stepped up its demands as the war with Iran continues to disrupt global energy markets and drive up the cost of diesel and other refined fuels. U.S. officials are particularly seeking action from major European economies, including France and Germany, in hopes that additional supplies entering the market will help bring prices down.
U.S. Treasury Secretary Scott Bessent publicly called on America’s European allies Thursday to move quickly rather than wait for the fuel crisis to worsen.
“Our European partners should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions,” Bessent said in a post on social media.
EU member states are expected to meet with the European Commission on Friday to discuss possible joint measures aimed at addressing the surge in fuel prices, according to a Commission spokesman.
The pressure from Washington comes as President Donald Trump considers an even more dramatic step: restricting or banning American diesel exports in an effort to increase supplies available to U.S. consumers and bring down prices at the pump.
“It is in Europe’s best interest to work with the United States as we pursue multiple pathways to boost the supply of refined products and lower costs for consumers,” a U.S. official told AFP.
Diesel has become one of the most acute economic consequences of the Iran war. The fuel is essential to trucking, agriculture, construction, manufacturing and shipping, meaning sustained increases can spread rapidly throughout the economy as businesses pass higher transportation and production expenses on to consumers.
In the United States, the national average price of diesel has soared more than 70% since the Iran war began, reaching approximately $6.39 per gallon, according to AAA data cited Thursday.
The extraordinary increase has intensified pressure on the administration to find additional supplies ahead of November’s midterm elections, with Republicans increasingly concerned about the political effects of higher fuel prices and the resulting increase in household expenses.
The administration has been exploring several ways to increase supplies of refined petroleum products. One option under consideration would restrict U.S. diesel exports, keeping more American-produced fuel inside the country rather than allowing it to be shipped overseas.
Trump confirmed Wednesday that the proposal remains under active consideration.
“I’m thinking about it,” Trump told reporters in the Oval Office.
But an export ban would carry significant risks. While keeping additional diesel in the United States could increase domestic supply and potentially ease prices in some regions, refiners produce gasoline, diesel and other petroleum products together. Disrupting the market for one product could alter refinery economics and potentially contribute to higher gasoline prices.
Trump himself acknowledged that possibility while discussing the proposal Wednesday.
An American export restriction could also deepen the fuel shortage overseas. Europe and other markets depend heavily on U.S. refined petroleum exports, and removing American diesel from the international market could drive global prices still higher unless producers elsewhere could quickly replace the lost supply.
That prospect has alarmed European officials, who are simultaneously being asked by Washington to release their own emergency stocks.
At the G20 trade talks in Milwaukee, U.S. Trade Representative Jamieson Greer nevertheless sought to emphasize cooperation between Washington and Brussels, saying there was an “eagerness on both sides to work together” on the diesel issue.
European officials made clear, however, that the possibility of an American export ban has caused concern.
EU trade chief Maros Sefcovic said Thursday that such a decision by Washington would be “unexpected for Europeans.”
Sefcovic spoke after meeting with Greer on the sidelines of the two-day gathering of G20 trade ministers in Milwaukee. He said the two did not engage in detailed discussions about energy exports, but agreed that communication would continue as governments search for a response to the crisis.
The transatlantic partners “decided to stay in close touch to avoid any surprises here,” he said.
Sefcovic warned that cutting Europe off from U.S. diesel supplies could inflict serious economic damage.
“It would have very dramatic consequences for our economic performance,” Sefcovic said of any potential diesel export ban.
France also expressed skepticism that Washington would ultimately take such a drastic step.
France’s minister delegate for international trade, Nicolas Forissier, told AFP in Milwaukee: “I can’t imagine that there will be a ban.”
Forissier emphasized that a reliable supply of diesel is critical to the economies of both Europe and the United States, saying governments on both sides of the Atlantic should instead work together to increase supply.
He said both sides will “try to find solutions.”
“In France, we’ll try to find balanced solutions all over the world,” Forissier added. “If not with the Americans, it will be with other countries.”
The administration, meanwhile, has strongly suggested that announcements from European governments could be imminent.
Speaking alongside Trump on Wednesday, Energy Secretary Chris Wright said the world would “hear announcements from our friends in Europe” concerning efforts to bring diesel prices down.
One of the central questions is whether European countries will draw down strategic petroleum or diesel reserves, injecting emergency supplies into the market in an attempt to relieve the shortage.
France said Thursday that Trump had not specifically asked President Emmanuel Macron to release French strategic reserves when the two leaders met on the sidelines of the United Nations General Assembly last week.
Macron, however, is preparing to convene G7 leaders by video to discuss the fuel crisis and possible coordinated measures.
According to the French presidency, the meeting is intended “to make progress on the various levers that can be used to address the rising fuel prices… including coordination on releasing reserves.”
Macron first announced plans for the meeting on Sept. 18. His office has said the G7 discussion is expected to take place in mid-October.
The pressure on global diesel supplies comes amid severe disruptions to energy markets resulting from the Iran war, which has pushed crude oil and refined-product prices sharply higher and raised concerns about the reliability of major shipping and production routes.
Because diesel inventories were already relatively constrained before the latest disruptions, the loss or interruption of additional supplies has had an outsized impact on prices. Refining capacity is also an important factor: additional crude oil alone cannot immediately solve a shortage of diesel if refineries lack sufficient capacity to turn that crude into the refined products consumers need.
For the Trump administration, the challenge is particularly urgent because diesel prices feed into far more than the cost paid directly by motorists driving diesel-powered vehicles. Nearly every product transported by truck can become more expensive when diesel costs surge, while farmers, construction companies and manufacturers also rely heavily on the fuel.
With average U.S. diesel prices now reported at $6.39 per gallon — more than 70% higher than when the Iran war began — the issue has become an increasingly significant economic and political concern just weeks before Americans vote in the midterm elections.
The administration is therefore pursuing several approaches simultaneously: pressing Europe to release strategic stocks, seeking additional supplies of refined fuel and keeping open the possibility of restricting American diesel exports.
For now, attention is turning to Friday’s European meeting, where EU governments will discuss whether they are prepared to respond to Washington’s demand and put emergency diesel supplies onto a global market struggling with some of the sharpest fuel-price increases in years.
{Matzav.com}
