The Zhitong Finance App learned that US President Trump said on Friday that Europe has agreed to release large reserves of diesel to ease the tight global fuel supply situation caused by the conflict in the Middle East and Eastern Europe. Previously, the average price of diesel in the US soared to a record high of 6.5 US dollars per gallon. International oil prices fell sharply in early Friday trading as Europe may adopt joint measures to release energy reserves.
Trump posted on social platforms on the same day that Europe has just agreed to release a large amount of well-stocked diesel reserves, and the relevant procedures will be initiated immediately. Meanwhile, according to media reports citing people familiar with the matter, France has proposed that EU member states release 50 million barrels of diesel reserves, and that International Energy Agency (IEA) member states release an additional 50 million barrels of crude oil reserves. However, this plan has yet to be independently verified, and there is still uncertainty about the specific implementation arrangements.
US diesel prices hit a record high, Europe plans to jointly release energy reserves
The global diesel market continues to be under pressure due to supply disruptions caused by the war in Iran and the Russian-Ukrainian conflict. According to the American Automobile Association (AAA), the average retail price of diesel in the US rose to a record high of 6.50 US dollars per gallon in late September, a sharp increase from a year ago.
Diesel is widely used in freight, agriculture, industrial production, and other economic activities. Continued price increases not only driving up transportation and business operating costs, but may also further exacerbate inflationary pressure in the US. As the November US midterm elections approach, the Trump administration is facing increasing political pressure and needs to take steps to curb the rise in fuel prices. US Treasury Secretary Bessent said on social media on Thursday that America's European partners should speed up implementation of existing commitments and immediately provide more supply to deal with ongoing disruptions in the energy market.
Bezent stressed that the US is taking action and also expects allies to turn promises into practical measures. Under pressure from the US government, EU member states are planning to hold urgent discussions on Friday to discuss how to coordinate a response to the sharp rise in diesel prices.
According to the media, citing an anonymous source familiar with the discussions, the plan proposed by France includes the release of 50 million barrels of diesel reserves by EU countries, and at the same time push the member states of the International Energy Agency to release 50 million barrels of crude oil reserves.
After the news broke, international oil prices fell markedly in early Friday trading, reflecting market expectations that additional energy supply might ease the tight situation. However, the relevant reports have yet to be independently verified, and the French government and the International Energy Agency have not immediately commented on this. As a result, it remains to be further clarified how much of Europe's reserves will eventually be released, when they will be implemented, and how countries will share them.
US diesel export restrictions raise concerns in Europe that the EU relies on the US for about half of its imports
Against the backdrop of continuing tight diesel supply, the prospect that the US may restrict diesel exports has also attracted great attention in the European energy market. The United States is the world's largest exporter of diesel. If the Trump administration imposes a comprehensive ban on diesel exports, it could not only affect global fuel trade, but also have a direct impact on European supply.
According to data from the International Energy Agency, in August of this year, diesel supplied by the US accounted for about half of the EU's total diesel imports, highlighting the European market's dependence on US diesel supply.
This background has also caused potential US export restrictions to be opposed by the US energy industry and raised concerns in Europe.
EU trade director Maros Sefcovic (Maros Sefcovic) said while attending the Group of Twenty (G20) trade ministers meeting in Milwaukee that he had discussed the soaring supply and price of diesel with US Trade Representative Jamieson Greer (Jamieson Greer).
Shevchovic pointed out that both Europe and the US have every reason to cooperate to jointly drive down the prices of diesel and other oil and gas products. At the same time, he said that if the US takes measures to restrict diesel exports, it will be an unexpected move and may have a negative impact on the European economic outlook.
For the EU, the joint release of reserves may not only increase market supply in the short term, but also help ease the pressure brought about by potential US export restrictions. However, whether the release of reserves can continue to depress diesel prices depends on the restoration of global energy supply.
Macquarie: The diesel crisis is essentially a global energy supply issue
Although Europe and the US are discussing the release of strategic reserves, some energy analysts believe that such measures may only temporarily relieve market pressure, making it difficult to fundamentally solve the problem of tight global energy supply.
Macquarie Group energy strategist Walt Chancellor pointed out in a research report on Thursday that the core problem facing the US is not only a shortage of diesel, nor is it just a shortage of refined oil products; it may even be not just an oil market problem, but a broader global energy issue.
Chancellor believes that the real solution is to let more oil pass through the Strait of Hormuz and enter the global market from the Middle East region. He said that if the stable supply of this key energy transportation channel cannot be restored, the other measures are more simply a redistribution of existing resources, making it difficult to substantially increase global energy supply.
The Strait of Hormuz is one of the world's most important oil transportation routes. In late February of this year, after the US and Israel launched an attack on Iran, shipping traffic in the strait was seriously affected, further exacerbating the global supply of crude oil and fuel.
However, energy transportation in the Strait of Hormuz has shown signs of recovery this week. The data shows that daily oil exports through the strait have recovered to pre-war levels. This change has provided a certain signal of supply improvement in the global energy market, but it remains to be seen whether supply chain disruptions and the tense situation in the diesel market caused by previous conflicts can be quickly mitigated.