Tensions have risen between Europe and Washington over diesel supplies and global inflation challenges

The confrontation between Europe and the United States over the global fuel crisis escalated on Friday, after the European Union rejected an American threat to ban diesel exports, warning that such a step would undermine confidence in Washington as a reliable partner, while France proposed a plan to pump 100 million barrels of diesel and crude oil in cooperation between European countries and members of the International Energy Agency to calm prices.

The moves come amid increasing pressure on energy markets as a result of the war in Iran, in addition to the ongoing repercussions of the war in Ukraine, at a time when refined products, primarily diesel and gasoline, have become more vulnerable to supply shortages due to shrinking available refining capacities. European Commission spokeswoman Anna-Kaisa Itkonen said: “We completely reject any ban on diesel. The ban will not be beneficial to anyone, and will undermine our confidence in the United States, a reliable partner.”

The European position came in response to an idea put forward by US President Donald Trump regarding the possibility of stopping diesel exports, as part of Washington’s pressure on European countries to make more efforts to reduce fuel prices by using their reserves. The Commission confirmed that the European Union is ready to take collective action in coordination with the International Energy Agency, including the possibility of withdrawing from strategic reserves if this is agreed upon.

In an attempt to contain tension and ease pressure on the market, France proposed pumping a total of 100 million barrels of fuel and crude oil. According to the proposal put forward during an online meeting of European officials, European countries would pump 50 million barrels of diesel, while member states of the International Energy Agency would release 50 million barrels of crude oil.

The French presidency said that President Emmanuel Macron discussed with Trump the global energy situation, and that a meeting of the leaders of the “G7” countries would be held as soon as possible to discuss developments. Germany joined the calls to avoid unilateral steps, warning of destabilizing global fuel markets.

Inflation in the euro area rose above expectations in September, reaching 3.8 percent, driven mainly by higher fuel and natural gas prices. At the same time, Eurostat data showed that the core inflation rate rose to 2.5 percent. Markets expect inflation pressures to continue, putting the European Central Bank under pressure to raise interest rates.

Global food prices also rose during September to their highest levels in about 4 years, with the increasing impact of shipping disruptions in the Black Sea and the Strait of Hormuz and climate concerns. The FAO warned that the continuation of these pressures would lead to their transmission to consumer prices, which constitutes a new challenge to the global economy.