Potential US diesel export ban threatens EU energy security, expert warns

MOSCOW, September 29. /TASS/. A potential US ban on diesel exports would force the European Union to tap into its strategic reserves, critically reducing its safety margin ahead of winter and hitting the trucking and agricultural sectors, Nikolay Novik, Deputy Director of the Higher School of Economics Center for International Relations and Economics, told TASS.

Earlier, US President Donald Trump said that Washington was very seriously considering imposing a ban on the export of diesel fuel due to rising prices in the country. CNBC reported that such a move could drive European diesel prices to unprecedented heights. Experts estimate that the US has accounted for roughly half of Europe's diesel imports in recent months. However, most European oil traders doubt Washington will enforce the ban, as the measure would also severely disrupt American oil majors.

"In this scenario, the EU would be forced to draw down its mandatory strategic reserves, which would critically enfeeble its safety margin for the winter. The trucking sector, agriculture, and other industries would bear the brunt," Novik said.

According to him, a ban would undermine the core logic of the EU-US energy rapprochement enshrined in the 2025 trade deal, which committed Europeans to buying $750 billion worth of US energy. "However, this uncertainty could ultimately play into Washington's hands by prompting Europeans to open their own stockpiles, thereby cooling the market," Novik added.

He noted that the fallout from potential restrictions could prove far more severe for Europe than for the United States. "Following the loss of Russian and Middle Eastern shipments, the US has become virtually irreplaceable for the EU, accounting for over half of European diesel imports," the expert observed.

He pointed out that diesel futures in Europe surged by 7% in a single day following Trump's remarks. "A full-scale ban could drive diesel prices well above the current record of $350 per barrel. Europe would have to outbid Latin America, which is vying for the same volumes," Novik continued.

The expert linked the discussions primarily to the situation on the US domestic market. "Trump's rhetoric about the White House looking 'very seriously' at a diesel export ban is driven chiefly by domestic politics. Fuel prices in the US are hitting records, with the November midterm elections just over a month away. Retail diesel in the country has climbed to a record $6.50 per gallon," he noted.

At the same time, the US administration lacks a unified stance on the matter, the expert added. "Energy Secretary Chris Wright has spoken of restrictions rather than a total ban, while the White House is simultaneously negotiating with oil companies on voluntary export curbs. The industry lobby also opposes the hardline option," he said.

"Trump himself acknowledges that such a measure could drive up domestic gasoline prices due to the geographical distribution of refining infrastructure. An export ban would create a fuel surplus in the South without solving the supply crunch in the Northeast, forcing refiners to cut utilization rates," Novik concluded.