US tells Europe to release diesel reserves as fuel prices surge

MILWAUKEE: The United States on Thursday told its European allies to help lower global diesel prices by releasing strategic reserves "immediately," with EU member states due to discuss the crisis on Friday.

Reports said the Trump administration wants France and Germany in particular to tap their stockpiles of diesel to try to curb prices sent soaring by the US war on Iran.

"Our European partners should accelerate delivery on their existing commitments and make additional supplies immediately available to address ongoing disruptions," US Treasury Secretary Scott Bessent said in a post on social media.

EU member states will meet with the European Commission Friday to discuss a coordinated response to soaring fuel prices, a Commission spokesman said.

Washington is piling on pressure to get European help with fuel costs, with US President Donald Trump on Wednesday floating the possibility of banning diesel exports.

High energy costs loom as a threat to Trump's Republican party in next month's midterm elections.

"It is in Europe's best interest to work with the United States as we pursue multiple pathways to boost the supply of refined products and lower costs for consumers," a US official told AFP.

At G20 trade talks in Milwaukee, US Trade Representative Jamieson Greer struck a conciliatory tone, saying there was an "eagerness on both sides to work together" on the diesel issue.

And Trump told reporters in Texas on Thursday that he "may" ask European countries to release diesel reserves.

- 'UNEXPECTED' -

Still, EU trade chief Maros Sefcovic told reporters Thursday that any move by the US to ban diesel exports would be "unexpected for Europeans."

He spoke on the sidelines of the two-day G20 trade ministers' gathering in Milwaukee, after meeting with Greer.

Sefcovic told reporters that he did not go into details with Greer on energy exports.

But the transatlantic partners "decided to stay in close touch to avoid any surprises here," he said.

"It would have very dramatic consequences for our economic performance," Sefcovic said of any potential diesel export ban.

France's minister delegate for international trade, Nicolas Forissier, told AFP in Milwaukee: "I can't imagine that there will be a ban."

He stressed the importance of diesel to the United States and European countries, adding both sides will "try to find solutions."

"In France, we'll try to find balanced solutions all over the world," Forissier added. "If not with the Americans, it will be with other countries."

Trump on Wednesday said he was still considering a possible ban on US diesel exports, while adding that he thought it could ultimately cause gasoline prices to rise.

"I'm thinking about it," Trump told reporters in the Oval Office.

Speaking alongside Trump, US Energy Secretary Chris Wright said Wednesday that the world would "hear announcements from our friends in Europe" to push diesel prices down.

Asked about a release from strategic reserves, the French presidency said no such demand had been made when Emmanuel Macron and Trump met on the sidelines of the UN General Assembly last week.

Macron would also soon convene a video meeting of G7 leaders "to make progress on the various levers that can be used to address the rising fuel prices... including coordination on releasing reserves."

Macron announced on Sept 18 a plan for such a meeting. The G7 gathering is expected in mid-October, according to Macron's press office.

Average US diesel prices have surged more than 70 per cent to US$6.39 a gallon since the start of the Iran war, according to AAA motor club data.

Fuel prices have caused living costs to soar, leaving Trump's Republican Party fearing it could lose control of Congress in November's midterm elections.--AFP