The White House has urged the European Union to draw down emergency diesel inventories to lower global fuel prices, as the Trump administration weighs further options before November's midterm elections. EU energy ministers meeting in Dublin discussed releasing more strategic oil stocks after the bloc's import bill rose by an extra €100bn since the US-Iran war began, even as Trump has separately threatened to ban diesel exports.
White House presses Europe on diesel stocks
The White House has urged the European Union to draw down emergency diesel inventories to lower global prices, according to two sources familiar with the effort. The push comes as President Trump and his administration pursue a range of options to ease fuel costs before November's midterm elections.
Soaring diesel prices have become a political headache for Trump and Republicans, particularly in farm states where the fuel is critical to agriculture, trucking and manufacturing. The administration is considering measures ranging from encouraging foreign stockpile releases to restricting U.S. diesel exports and working with refiners to increase domestic supplies.
EU already paying an extra €100bn
Europe faces its own strain on fuel costs. The EU has spent an extra €100bn on fossil fuels since the start of the US-Iran war for the same volume of imports, energy commissioner Dan Jørgensen said Tuesday.
Jørgensen said the bloc's energy ministers discussed releasing the remainder of the strategic oil reserves committed to in March to ease price pressure as fuel costs rise. IEA chief Fatih Birol said further releases may be necessary if the supply disruption grows larger than current levels, adding that some European countries had not yet released all the stocks they pledged in March. The US said Tuesday it had released the remainder of the strategic stocks it announced in March, when the IEA's 32 member states agreed to their largest-ever collective release of strategic reserves.
EU officials play down Trump's export ban threat
Washington's push follows Trump's threat last week to ban diesel exports, a step EU officials played down ahead of the Dublin meeting. Ireland's energy minister, Darragh O'Brien, said he had spoken with US administration officials at last week's UN General Assembly. According to the Financial Times: "It doesn't look like a [90-day ban] is something that's going to happen"
O'Brien also backed windfall taxes on oil and gas companies as one of the few short-term measures Europe could take to ease household bills, joining six other member states including Germany, Italy and Spain. Spain's energy minister, Sara Aagesen Muñoz, said Madrid would limit the increase in a regulated gas tariff to 15%, while Rome has pressed its fuel suppliers to cap pump prices as Italy runs short on fiscal room for further relief.
Sources: Commodities & Futures News, Financial Times
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