The Trump administration has urged European countries to urgently release some diesel reserves, stating that American farmers, truck drivers, and businesses should not bear the burden of global supply disruptions alone.
At the time of this statement, U.S. President Donald Trump was still considering whether to pursue a ban on diesel exports in an attempt to control high energy prices.
Data from the American Automobile Association ( AAA ) shows that at the end of last month, the average price of diesel in the United States soared to a record high of $6.50 per gallon, a significant increase from a year ago, due to supply disruptions caused by the Iran war and Russia's full-scale invasion of Ukraine.
U.S. Treasury Secretary Scott Bosworth posted on social media on Thursday, stating that the United States' European partners "should accelerate the fulfillment of existing commitments and immediately provide additional supplies to address the ongoing disruptions."
He added, "The United States is doing its part. We hope that our allies will fulfill their commitments with action."
As the mid-term elections in November approach, the U.S. government is facing increasing political pressure to address the soaring fuel prices.
On Thursday, in Texas, Trump told reporters that he "might" request European countries to release their diesel reserves. The U.S. president had previously stated that he was considering a ban on diesel exports "very seriously," but this week, as crude oil exports through the Strait of Hormuz, which is crucial for global energy transportation, have resumed, he seems to have cooled down on this idea.
Trump said on Wednesday that he is still "considering" banning diesel exports, but also acknowledged that such a move could have a "negative impact" on gasoline.
EU Crisis Consultations
As the world's largest diesel exporter, if the United States were to completely ban diesel exports, it has sparked strong opposition from the American energy industry and has also raised concerns on the other side of the Atlantic Ocean.
Data from the International Energy Agency shows that in August, the United States supplied about half of the diesel imports for the European Union, highlighting the vulnerability of this group of 27 countries to U.S. export bans.
EU member states are scheduled to hold crisis talks on Friday in order to seek coordinated measures to address the soaring diesel prices.
European Union trade commissioner Maros Sefcovic told reporters during the G20 Trade Ministers' Meeting in Milwaukee that he had discussed diesel supply and soaring prices with U.S. trade representative Jamison Greer.
According to Reuters, Novak Djokovic stated: "We have a strong common interest in cooperating to reduce prices, whether it's for diesel or other products such as oil and natural gas supplies."
He added that it would be surprising if the United States took measures to restrict diesel exports, and it would have a negative impact on the economic prospects of Europe.
"This is a global energy issue."
Macquarie Group's energy strategist said on Thursday that it is understandable that the United States' stance on the global diesel crisis has clearly taken on a global dimension.
Walter Chandler of Macquarie Group said in a research report: "The core issue facing the United States is not the diesel problem, nor is it the refined oil problem, and it may not even be an oil problem. This is a global energy issue."
So what is the solution? In short, it is to allow more crude oil to flow out of the Middle East through the Strait of Hormuz. Any other approach is essentially just moving a deck chair around.
The Strait of Hormuz is an important passage for global oil trade. After the United States and Israel attacked Iran in late February, shipping was temporarily disrupted. However, this week, the daily export volume through the strait has returned to pre-war levels.
—— CNBC's Kevin Breuninger contributed to this report
