US pressures EU to release diesel reserves to avert export ban threat

The Trump administration has asked several European Union governments to release a large portion of the EU's strategic diesel reserves in an effort to curb sharply rising fuel costs, according to four EU and US government officials who spoke to Politico.

The proposal, put forward by US Energy Secretary Chris Wright, is being presented as an alternative to President Donald Trump's threat of a blanket ban on diesel exports from the United States. Under the plan, EU governments would release 120 million barrels of diesel from their national strategic reserves over a 180-day period, according to one European government official.

That would amount to well over a third of the roughly 315 million barrels of diesel EU countries held in reserve as of June this year, based on Eurostat figures. Germany, France, Italy, Spain and Poland hold the largest diesel stockpiles among EU countries.

German government sources confirmed on Thursday that the US had already contacted Berlin on the matter, though Germany is only one of several EU states approached by the Trump administration, according to a person familiar with the plans. A senior European government official responsible for energy in a major EU country said their country was approached bilaterally by the US last week. The conversation was described as largely hypothetical, raising the question of how Europe would feel about releasing part of its reserves to ease price pressure and reduce supply strain, which could also help avoid further discussion of an export ban. The official said they responded that such a move could seriously strain transatlantic relations.

The UK government is also engaged in "forward-looking and open" talks with the US on a similar matter, a British official said.

Wright, like the US oil and gas industry, opposes an export ban. At a press briefing Thursday, a European Commission spokesperson would not confirm whether the EU had received Wright's request, saying any potential release of stockpiles would be coordinated exclusively through the International Energy Agency, as was done over the summer. The Commission remains in close contact with member states and Washington, the spokesperson added.

Meanwhile, Trump confirmed Wednesday that a diesel export ban remains under consideration. Speaking at an Oval Office event, he said he discusses the idea often with Wright and Interior Secretary Doug Burgum, noting it could lower diesel prices but push up prices for other fuels, such as gasoline. Wright said the administration would soon announce measures aimed at lowering diesel prices, and said Europe's partners would also announce new diesel supplies set to enter the market.