120 million barrels of diesel demand from the USA to Europe

The rise of diesel prices to record levels in the USA has become one of the important issues on the agenda of the Donald Trump administration. It has been claimed that Washington wants European Union countries to release their strategic diesel reserves.

According to German Der Spiegel, the US administration asked EU countries to release a total of 120 million barrels of diesel from strategic reserves within 180 days. It was stated that Washington gave the message that it could stop diesel exports to Europe if the demand is not met.

According to the news by Der Spiegel, based on the German government and EU Commission sources, the USA asked Europe to put 120 million barrels of diesel on the market within 180 days.

It was stated that this request was outside the reserve decision taken by the member countries of the International Energy Agency (IEA) in March. It was claimed that the US Ministry of Energy also conveyed the request in a letter to the German Ministry of Economy and Energy.

It was stated that Washington may stop diesel exports to Europe if its demand is not met.

The German press stated, "The US move caused concern in Brussels. While EU Commission President Ursula von der Leyen's team welcomed the development with concern, high-level talks with Washington began."

In his statement on September 30, Trump said that he was considering the option of imposing a ban on diesel exports. The White House's options include asking refineries for voluntary export restrictions.

The reason why the US administration wants Europe to use its reserves is the high fuel prices in the country.

The impact of the war in Iran on energy supply, problems in the Strait of Hormuz and Ukraine's attacks on Russian refineries affected the global diesel market. The price of a gallon of diesel in the USA recently broke a record, rising to $6.53.

High prices particularly affected the agricultural and transportation sectors. The increase in fuel prices has also increased the pressure on the Trump administration and Republicans ahead of the midterm elections on November 3.

The 120 million barrels of diesel that Washington wants is equivalent to more than 16 million tons of fuel.

Germany's total strategic diesel reserves are just over 4 million tons. The total strategic reserve of the EU is approximately 39 million tons.

These reserves do not consist entirely of road diesel. The reserves also contain other kerosene products such as heating oil.

Germany and France hold approximately 35 percent of the EU's strategic diesel reserves.

The EU meets approximately 80 percent of its diesel needs with its own resources. The remaining 20 percent is covered by imports. About half of these imports come from the United States.

Germany's dependence on US diesel is lower. Diesel from the USA meets approximately 5 percent of Germany's total domestic demand.

Therefore, the US's suspension of diesel exports to Europe is not expected to directly cause a supply crisis. However, experts warn that such a decision could raise prices.

Commerzbank Chief Economist Jörg Krämer said that if the USA imposes an export ban, diesel prices could increase by 20 to 25 percent. The EU Commission also stated that there may be a sharp increase in prices.

European countries decided to release some of their strategic oil reserves to the market in March. The decision involved the release of approximately 400 million barrels of oil worldwide.

EU countries had committed to meet 20 percent of this amount. Germany was planned to release 19.5 million barrels of oil, equivalent to approximately 2.65 million tons.

However, it has been reported that the 120 million barrels of diesel that the USA now wants is an additional demand beyond the decision taken in March.

EU Energy Commissioner Dan Jorgensen announced that they discussed with the President of the International Energy Agency Fatih Birol whether more emergency reserves will be released to the market.

Jorgensen said that no decision has been made on this issue yet.