The threat adds another layer of risk to a diesel market already squeezed by Russia’s export ban, China’s fuel export halt and Middle East disruption from the Iran war. A US export ban would hit Europe hardest, given its reliance on US fuel, and would likely widen diesel cracks and the premium of European gasoil over crude. A coordinated EU release of around 120 million barrels, by contrast, could ease middle distillate prices in the near term, though it would leave Europe with thinner buffers heading into winter. For crude, the episode underlines that the tightest part of the oil market is refined products rather than barrels, keeping Brent supported above $100 while product markets stay volatile.
—
Earlier:
—
Info via Reuters.
Washington wants Europe’s diesel reserves on the market before the midterms, and it is prepared to threaten Europe’s supply of US fuel to get them.
Summary:
- The US told Germany and France to release emergency diesel stocks or face a potential US diesel export ban, according to three sources
- One source said the US wants the EU to release 120 million barrels of diesel over six months
- Trump is seeking to lower record US diesel prices ahead of November’s midterm elections
- The EU’s energy taskforce meets on Friday; the IEA has not yet asked Germany to release stocks
- Russia’s diesel export ban to end-October and China’s fuel export halt are adding to the strain
- Macron plans a G7 leaders’ video call on fuel prices and a coordinated reserve release
The Trump administration has warned Germany and France to release emergency diesel inventories or risk a potential US ban on diesel exports, according to three people familiar with the discussions, as Washington steps up pressure on Europe to help bring down global fuel prices.
One source based in a European capital said the US has asked the European Union to release 120 million barrels of diesel over the next six months.
The warning comes as President Donald Trump weighs an export ban to lower record US diesel prices ahead of November’s midterm elections. US officials have been particularly frustrated with France and Germany, which they believe have not fully delivered on earlier commitments to release emergency oil and fuel stocks.
The EU’s energy taskforce, which brings together the European Commission and the 27 member states, will hold a call on Friday morning to discuss the situation, a Commission spokesperson said. The Commission, Germany, France, Italy, Britain and Ireland had already held a call on Thursday on a possible release, according to two EU officials. Germany’s economy ministry said the International Energy Agency had not yet asked it to release stocks, and it was unclear when the agency would next meet.
US Energy Secretary Chris Wright said he was highly confident Europe could ease prices by tapping its diesel reserves, arguing the timing was right ahead of the harvest and winter heating seasons and hinting that positive news was coming. Treasury Secretary Scott Bessent said the US had met its share of a March agreement among IEA members by releasing around 170 million barrels of oil, and called on allies to follow through on their own commitments.
For Europe, the request poses a dilemma. Releasing stocks could ease fuel costs at home, but would leave the region with smaller buffers if the crisis deepens should the US and Iran fail to reach a peace deal. Europe has grown increasingly reliant on US fuel since banning Russian imports over the war in Ukraine and since the Iran war disrupted Middle East supplies.
Pressure on diesel markets has been building from several directions. Russia has extended its ban on diesel exports to the end of October after Ukrainian attacks damaged many of its refineries, and Chinese refiners have suspended October fuel exports to protect domestic stocks.
The outcome of Friday’s EU call, and whether Washington moves ahead with an export ban, will shape the diesel supply outlook as Europe heads into winter.
This article was written by Eamonn Sheridan at investinglive.com.