U.S. reportedly asks Germany and France to release diesel stockpiles: What that means for a U.S. ban on exports of the fuel

By Nora Redmond

The Trump administration asked the European Union to draw down 120 million barrels of diesel over the next six months, Reuters reports

The U.S. has reportedly told the European Union to release 120 million barrels of diesel from its stockpiles in the next six months.

The Trump administration is reportedly telling Europe to release diesel from its stockpiles, and analysts are assessing the effect such a move could have on a potential U.S. ban on exports of the fuel.

Reuters reported that the U.S. has told Germany and France to release diesel from their stockpiles or face a possible diesel export ban. Another source who spoke to the news outlet said the Trump administration asked the European Union to draw down 120 million barrels of diesel over the next six months.

Reuters also reported that the E.U. Commission, France, Ireland, Britain and Italy are holding a discussion over the phone about the possibility of releasing diesel stocks, according to an E.U. official.

"I spoke with my French counterpart yesterday. Very good conversation," U.S. Trade Representative Jamieson Greer told Bloomberg on Thursday. "I let him know that this is an idea that that we've had in the U.S. We'd love to have a collaborative response to this."

He added: "I'll meet with my European Union officials and counterparts today, and I'll carry the same message."

Bloomberg also reported that E.U. Commission energy spokesperson Anna-Kaisa Itkonen said that the International Energy Agency would meet on Friday and that the E.U. would "take action as necessary."

It comes as the Trump administration ramps up efforts to lower diesel prices ahead of the midterm elections on Nov. 3.

In September, President Donald Trump said he would back a ban on exports of U.S. diesel to help lower costs after diesel reached an all-time high of $6.53 a gallon last month. Prices were hovering around $6.39 a gallon early Thursday, according to AAA.

Strategists have largely been in agreement that although restrictions on the international shipping of U.S. diesel would likely ease prices temporarily, once storage becomes full, prices could spike again.

A team at Goldman Sachs led by Daan Struyven, head of oil research, recently said that if diesel stocks reached full capacity in nine to 10 weeks or sooner, U.S. retail gasoline prices would increase by $0.3 a gallon each week. The strategists also said that each week of the export restriction could add about 2% to diesel prices in Europe.

A release of European strategic stockpiles of diesel could offset around half of that price rise, they said.

European countries in the Organization for Economic Cooperation and Development still had 190 million barrels of diesel in reserves at the end of June, according to Goldman Sachs. That is equivalent to almost 500 days of U.S. diesel imports and considerably higher than the reserves of other OECD members.

-Nora Redmond

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10-01-26 0945ET