The Trump administration has pressured European governments to release strategic diesel reserves and threatened to ban US diesel exports if they refuse. EU capitals entered crisis talks this week to coordinate a joint response, while Washington's own energy chief accused several European countries of falling short on pledges made in March.
Three people familiar with the matter told the Financial Times that the US administration has pressured European countries to release strategic diesel stocks, warning it could ban US diesel exports if they do not comply. The ultimatum has pushed EU capitals into crisis talks this week.
Brussels seeks a joint response
EU energy commissioner Dan Jørgensen held talks on Thursday with officials from France, Germany, the UK, Italy and Ireland to coordinate a response to the US threats, though no decision on a release was taken. European Commission spokesperson Anna-Kaisa Itkonen said the bloc was holding separate, high-level contacts with both member states and the US administration on the issue.
Washington's pressure campaign
Trump faces pressure to lower prices at the pump ahead of the US midterm elections, and the US oil industry has lobbied his administration this week to push European allies toward releasing diesel stocks rather than face an export ban, which it warns could raise petrol and other product prices instead. One industry person said Europe may hold up to 400 million barrels of diesel in commercial inventories and stockpiles, a release of which could bring down global prices. Reuters separately reported that the US administration wants the EU to release 120 million barrels over six months.
Disputed compliance with March pledges
Under a March agreement among International Energy Agency members, Europe pledged 32.7 million barrels of government stocks and 74.8 million barrels of industry reserves, 70% of them oil products, while the Americas supplied 172 million barrels. US energy secretary Chris Wright said: "We urge every member country to fulfil its commitments." IEA head Fatih Birol said Tuesday that Europe had made major efforts, but some crude oil and product stocks still remain to be released.
Analysts urge caution
Analysts at Energy Aspects noted the EU's reserves are heavily weighted toward diesel, with 195 million barrels on paper, though they believe governments are unlikely to release pledged volumes quickly given the ongoing conflicts in the Middle East and between Russia and Ukraine. Rapidan founder Bob McNally said the US may step back from restricting exports if Europe steps up on its pledged diesel stock draws. A German official said Berlin had received no new requests from the IEA to release reserves, cautioning that the market must not be destabilised.
Source: Financial Times
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