The U.S. government has warned Germany and France, two major European economies that hold a significant portion of the European Union's emergency reserves, that they will face a ban on diesel exports from the United States if they do not release diesel from their emergency reserves.
Rising Global Diesel Prices
With crude oil prices rising above $100 per barrel in September and global fuel markets tightening, diesel prices in many countries, including the United States, have reached their highest levels. The retail price of diesel in the United States has averaged $6 per gallon and has even increased to $6.50 per gallon.
Read more: Brent crude oil price reached $100.02
Pressure on Europe to Release Reserves
The U.S. government has not yet ruled out a ban on diesel exports, although the President of the country seems less inclined towards this action. He stated that this issue is being discussed daily, but it appears that it may have a negative impact on gasoline prices. U.S. officials are looking for other ways to alleviate the diesel crisis, including pressuring Europe to release diesel from emergency reserves.
Overall, Germany and France hold about 35% of the European Union's strategic diesel reserves. The European Union is estimated to have about 39 million tons of diesel, equivalent to more than two months of consumption for the bloc. The U.S. government is pressuring European countries that have not yet released all their emergency reserves to fulfill their commitments.
Chris Wright, the U.S. Secretary of Energy, said at a press conference, "You will hear from our friends in Europe about the new diesel supply that will come to market. This will significantly reduce diesel prices." Wright also referred to the commitments of the United States and Japan, stating that some European countries have only released part of the crude oil and petrochemical products they had promised.
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