America Pressures Europe to Release Diesel Reserves "Immediately" to Curb Prices

- European officials are holding crisis talks amid increasing U.S. pressure on the region to use its emergency diesel stocks to curb rising prices, or face a potential ban on U.S. fuel exports. The European Commission stated that European officials discussed, on Friday, measures to address rising diesel prices, while France announced it would chair a meeting of G7 leaders on "the global energy situation" later on Friday.

This veiled threat from the U.S. administration represents an escalation of pressure on Europe, as U.S. President Donald Trump seeks to lower fuel prices in the United States ahead of the upcoming midterm elections in November. Diesel is the primary fuel for the global economy, powering trucks, tractors, freight trains, and other commercial vehicles.

The United States is the largest exporter of this fuel in the world, and Trump has promoted a ban on diesel exports as a means to bolster domestic supplies and thus lower prices. Analysts for the Ufq News Network stated that a U.S. ban on diesel exports would significantly impact Europe, which is a net importer of fuel.

Last year, the United States supplied about 13% of total diesel imports for Europe, the UK, and Turkey, which amounted to 2.3 million barrels per day, according to data from Energy Aspects, a market research firm. However, resorting to its emergency reserves could leave Europe vulnerable to supply disruptions if the wars in the Middle East and Ukraine continue.

U.S. Treasury Secretary Scott Piesen urged European countries on Thursday to release diesel stocks "immediately," writing in a post on the platform X, formerly Twitter, that "farmers, truck drivers, and American businesses should not bear the burden of the global diesel shortage." U.S. Energy Secretary Chris Wright, who had previously expressed reservations about a ban on U.S. diesel exports, told Fox News on Thursday that the United States "will certainly ask" Europe to release diesel from its strategic reserves.

He added: "This is the right time to release diesel stocks in a coordinated manner, as we enter the harvest season and the winter heating oil season. Now is the time to pump more diesel into the market."

The American-Iranian war, which has entered its eighth month, has disrupted crude oil and refined petroleum product flows from the Middle East. Although Europe is not currently suffering from a significant supply shortage, global supplies are limited and prices have risen sharply.

Diesel prices in the United States have also risen significantly since the beginning of the war, surpassing $6 per gallon last month for the first time, according to data from the American Automobile Association (AAA). The average price reached $6.40 per gallon on Friday morning.

Anna-Kaisa Itkonen, a spokesperson for the European Commission, told reporters at a press conference on Thursday that member states are in "very close contact" regarding diesel supplies, and that they are also in communication with the U.S. administration. She added: "I assure you that many phone calls and meetings are currently taking place." "Conflict and competition" Richard Bronze, co-founder of Energy Aspects, stated that "the American ban will lead Europeans to pay higher prices for (imported) diesel...

because they will be competing with other regions that import large quantities of it, such as Latin America." He added that the United States may be one of several suppliers to Europe, but Washington is such an important supplier to the international market that its export ban will lead to "conflict and competition among countries for what remains."

The standard diesel prices in Europe have more than doubled since the start of the American-Iranian war in late February, according to data from the Intercontinental Exchange. Compounding the situation, the ban on diesel exports from Russia, which Moscow recently extended until the end of October following drone strikes on its refineries by Ukrainian forces.

Bronze stated that there are indications from China that it may tighten restrictions on its oil product exports. EU member states are required to maintain oil stocks equivalent to 90 days of net imports, but the European Commission does not specify how these stocks should be divided between crude oil, jet fuel, kerosene, and diesel.

Matt Stanley, head of market interaction at Kepler, highlighted the dilemma facing Europe and the risks of resorting to emergency reserves in an unstable geopolitical environment. He told Afaq News: "If the underlying disruption continues, it cannot be sustained to withdraw stocks indefinitely, without ultimately leading to a much larger supply problem."

In March, member countries of the International Energy Agency agreed to pump 400 million barrels of oil into the global market, the largest release of emergency oil stocks in history, in response to the American-Iranian war. However, the United States argues that Europe has not fulfilled its commitments under this agreement, and Bronze from Energy Aspects noted that the EU has only released less than 8% of the total 64 million barrels of oil products - including diesel - that it pledged to provide during the spring.