Washington demands EU release 120 million barrels of diesel over six months

US weighs export restrictions as midterm elections loom

US President Donald Trump speaks at the Oval Office of the White House in Washington, D.C., on Wednesday, announcing an energy infrastructure project in Alaska. [Reuters]
US President Donald Trump speaks at the Oval Office of the White House in Washington, D.C., on Wednesday, announcing an energy infrastructure project in Alaska. [Reuters]

The Trump administration has told France and Germany to release their strategic diesel reserves onto the market, warning that Washington could restrict US diesel exports if they refuse.

The pressure campaign comes as the United States seeks to bring down surging domestic fuel prices ahead of November midterm elections.

The US has asked the EU to release 120 million barrels of strategic diesel reserves over the next six months, Reuters reported Thursday (local time). Washington believes France and Germany in particular have not fully honored earlier commitments to release reserve stocks, according to sources familiar with the matter.

More than 30 member countries of the International Energy Agency agreed in March to release a combined 400 million barrels of strategic petroleum reserves to stabilize energy prices. The US committed 172 million barrels of that total, while European nations took on roughly 20 percent of the overall volume. Washington has since announced an additional release plan of up to 40 million barrels through a loan arrangement.

The pressure comes as diesel prices in the United States have risen sharply. President Donald Trump said Wednesday he continues to consider a diesel export ban as one option to lower domestic prices. However, concerns have been raised that restricting exports could have adverse effects on other domestic energy prices, including gasoline.

The French presidential office said Emmanuel Macron and Trump did not discuss the release of strategic diesel reserves when they met on the sidelines of the UN General Assembly last week. Macron is expected to convene a G7 leaders' video summit to discuss energy prices and supply issues, according to reports.

Germany's Economy Ministry did not immediately respond to Reuters' request for comment, and France's Energy Ministry also did not reply.

Europe has grown increasingly dependent on US fuel as restrictions on Russian crude and petroleum product imports have combined with supply disruptions in the Middle East. The US is currently the world's largest diesel exporter, shipping roughly 1.2 million barrels a day overseas, meaning any actual export restriction could have a significant impact on global diesel markets.


brunch@heraldcorp.com