US pressures Europe on diesel reserves amid export ban threat

Investing.com -- The US administration has warned European countries it may ban diesel exports unless they release strategic reserves, according to three people familiar with the matter.

EU energy commissioner Dan Jørgensen held talks with officials from France, Germany, the UK, Italy and Ireland on Thursday to coordinate a joint response to the threats from President Donald Trump. No decision was made on a reserve release.

Anna-Kaisa Itkonen, a spokesperson for the European Commission, said the bloc is in close contact with member states on how to proceed and maintains separate high-level contacts with the US administration. She described these as "intense contacts given the ongoing situation."

A Trump administration official said it is in Europe's best interests to work with the US as it pursues multiple pathways to boost the supply of refined products and lower costs for consumers.

Trump faces pressure to lower pump prices ahead of US midterm elections. The US oil industry has urged the administration to ask European allies to release diesel stocks as part of a lobbying campaign this week aimed at preventing a US export ban.

One industry source said Europe may hold up to 400 million barrels of diesel in commercial inventories and stockpiles, which could bring down global prices if released.

IEA members agreed in March to release 400 million barrels of emergency stocks globally. Europe pledged to release 32.7 million barrels of government stocks and 74.8 million barrels of industry reserves, 70% of which were oil products. The Americas provided 172 million barrels.

US energy secretary Chris Wright said while the US and Japan are delivering on their commitments, several European member countries have released only a fraction of the crude oil and petroleum products they pledged.

In a Fox News interview on Thursday, Wright said he was "highly confident" that Europe would help. "This is a time for a co-ordinated release of diesel stores as we go into harvest season and we go into winter heating oil season. Now's the time to bring more diesel to the market, and that diesel is available," he said.

Fatih Birol, head of the IEA, said on Tuesday that some European countries had not yet released all the stocks they committed to in March.

A German official said the country had received no new requests from the IEA to release reserves, adding that the market must not be destabilized.

A UK government spokesperson said the country has a diverse and resilient supply and continues to engage with international partners and the UK fuel industry.

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