EU energy officials meet today as a transatlantic standoff erupts over diesel prices, with the Trump administration threatening a 90-day ban on US diesel exports unless France and Germany release 120 million barrels from their strategic reserves. The soaring cost of fuel in the United States, where prices have climbed to $6.40 a gallon, has intensified voter discontent ahead of next month’s midterm elections.
Emergency Talks in Brussels and Transatlantic Friction
An emergency meeting between EU member states and the European Commission is scheduled for early in the day, a commission spokesperson said late last night. European trade chief Maroš Šefčovič told reporters yesterday on the sidelines of the G20 trade ministers gathering in Milwaukee that any move by the US to ban diesel exports would be “unexpected for Europeans”.
“It would have very dramatic consequences for our economic performance,” he said of any potential diesel export ban. Šefčovič added that while he did not go into detail with US Trade Representative Jamieson Greer on energy exports, the transatlantic partners “decided to stay in close touch to avoid any surprises here”.
Diplomats speaking on condition of anonymity to Euronews described the tone from Washington as “rough,” noting that the US was not sending “gentle diplomatic messages.” Euronews also reported that European Energy Commissioner Dan Jørgensen called a new emergency release “a possibility,” stating that officials were in discussions with International Energy Agency members on the right timing for a drawdown.
Diverging Views on Market Drivers and Reserves
However, most analysts point to the Iran War as the primary driver behind soaring fuel costs. Average US diesel prices have surged more than 70% to $6.39 a gallon since the start of the conflict, according to AAA motor club data.
Britain has held talks with European allies—including the European Commission, Germany, France, Italy, and Ireland—regarding a potential drawdown of emergency stockpiles following the US pressure. US Treasury Secretary Scott Bessent ratcheted up the rhetoric in a social media post, writing: Our European partners should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions.
US Energy Secretary Chris Wright expressed high confidence that Europe could help alleviate global prices, telling Fox News, This is a time for a coordinated release of diesel stores as we go into harvest season and we go into winter heating oil season.
He added, Now’s the time to bring more diesel to the market, and that diesel is available.
In contrast, French minister delegate for international trade Nicolas Forissier told AFP in Milwaukee, I can’t imagine that there will be a ban.
He emphasized that both sides would try to find balanced solutions globally. Meanwhile, the French presidency noted that no such formal demand regarding strategic reserves was made when Emmanuel Macron and Donald Trump met at the UN General Assembly.
Market Consequences of a Potential Export Ban
While an export ban might offer temporary relief at the diesel pump, financial analysts warn of severe secondary effects. Goldman Sachs reported that once diesel storage reaches capacity, each additional week of an export ban could cause domestic gasoline prices to jump by 30 cents per gallon.
The longer a diesel export ban lasts, the more disruptive it would likely be by putting upward pressure on gasoline prices because diesel, gasoline and jet fuel are largely produced together,
analysts at Goldman Sachs wrote in a report. Wood Mackenzie analyst Alan Gelder reinforced this warning, stating, The irony of a U.S. diesel export ban is that it would likely increase costs for American consumers.
President Trump acknowledged these complexities in the Oval Office on Wednesday, telling reporters he was considering the ban but also believed it could ultimately cause gasoline prices to rise. I’m thinking about it,
he said.
Macron Convenes G7 Leaders to Address Rising Fuel Costs
High energy costs present a direct political threat to the Republican party in November’s midterm elections. To coordinate a broader response, French President Emmanuel Macron announced plans to convene a video meeting of G7 leaders in mid-October to address rising fuel costs and coordinate reserve releases globally.
As technical talks proceed under the European Commission’s crisis-monitoring table for energy security, trade representatives continue to weigh immediate market stabilization against long-term economic stability, with Brent crude having traded at about $72 a barrel in February before the outbreak of the war in Iran.
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