The United States has called on its European allies to release strategic diesel reserves "immediately" in an effort to lower global diesel prices, which have surged due to the ongoing conflict with Iran. US Treasury Secretary Scott Bessent stated that European partners should accelerate delivery on their existing commitments and make additional supplies available to address ongoing disruptions. This move is aimed at curbing prices that have been sent soaring by the US war on Iran.
The issue is set to be discussed by EU member states and the European Commission on Friday, as they seek a coordinated response to the crisis. The US is piling on pressure to get European help with fuel costs, with US President Donald Trump even floating the possibility of banning diesel exports. High energy costs pose a threat to Trump's Republican party in next month's midterm elections, and the US is seeking to work with Europe to boost the supply of refined products and lower costs for consumers.
A US official emphasized that it is in Europe's best interest to work with the United States to address the issue. At G20 trade talks in Milwaukee, US Trade Representative Jamieson Greer struck a conciliatory tone, saying there was an "eagerness on both sides to work together" on the diesel issue. Trump also told reporters in Texas that he "may" ask European countries to release diesel reserves.
However, EU trade chief Maros Sefcovic expressed surprise at the US suggestion of a potential ban on diesel exports, saying it would have "very dramatic consequences for our economic performance". He stated that the transatlantic partners had decided to stay in close touch to avoid any surprises. France's minister delegate for international trade, Nicolas Forissier, also downplayed the likelihood of a ban, stressing the importance of diesel to both the US and European countries.
Forissier added that both sides will "try to find solutions" and that France will seek balanced solutions globally, not just with the US. Trump had previously stated that he was still considering a possible ban on US diesel exports, but noted that it could ultimately cause gasoline prices to rise. US Energy Secretary Chris Wright said that the world would "hear announcements from our friends in Europe" to push diesel prices down.
The French presidency stated that no demand had been made to release strategic reserves when Emmanuel Macron and Trump met on the sidelines of the UN General Assembly last week. However, Macron is set to convene a video meeting of G7 leaders in mid-October to discuss rising fuel prices and coordination on releasing reserves. Average US diesel prices have surged more than 70 percent to $6.39 a gallon since the start of the Iran war, according to AAA motor club data.
The surge in fuel prices has caused living costs to soar, leaving Trump's Republican Party fearing it could lose control of Congress in November's midterm elections. The US and Europe are seeking solutions to address the issue, with a focus on coordinating efforts to release diesel reserves and lower global prices. The G7 gathering is expected to make progress on the various levers that can be used to address the rising fuel prices.
Key points
- US urges Europe to release strategic diesel reserves to lower global prices
- EU member states to discuss coordinated response to crisis on Friday
- Average US diesel prices have surged more than 70 percent since the start of the Iran war
