President Donald Trump has said that the United States would not impose a diesel export ban, as he hailed a decision by European countries to release the fuel from their reserves.
Mr Trump said: “I asked for it. Europe has a lot of diesel and they’re going to be making a major world contribution – and so are we.”
European Commission President Ursula von der Leyen had earlier welcomed a decision by the leaders of the G7 group of nations to release 100 million barrels of diesel and crude oil from strategic reserves in the coming months in order to help lower prices.
The group said in a statement that it will undertake a co-ordinated release of 100 million barrels of diesel and other reserves through the International Energy Agency (IEA) to try and stabilise world energy markets.
“We welcome the decision of G7 countries not to impose any export bans on allies and the continued solidarity between partners. We support an IEA-coordinated release of fuel stocks,” Ms von der Leyen wrote on X.
President Trump, who had threatened to ban exports of US diesel if France and Germany did not release some of their diesel stocks, welcomed the measure.
“Well, it was never really on the table. But what Europe did was a great thing,” Mr Trump said at the White House when asked if a US export ban was now off the table.
“And we’re not going to be doing the export ban, we’re going to be doing what we’re supposed to do.”
US oil prices dropped sharply – as much as 5% at one point – while international benchmark Brent crude briefly fell back below $100 per barrel.
The Iran war sparked the biggest emergency stock release ever of 400 million barrels in March, coordinated by the International Energy Agency.
It was uncertain how much of the petroleum in the new agreement would come from what remains from the March pact.
IEA Executive Director Fatih Birol said this week that members had released about two-thirds of the 400-million-barrel agreement.
The release will begin immediately and last four months, with a substantial amount of diesel to be released within 20 days by G7 members and partners, the statement said.
It did not provide a breakdown of the volumes of crude, diesel and other products to be released or say which countries would participate.
“We will convene in the context of the IEA in the coming days to discuss the possibility of additional diesel releases as necessary,” the G7 statement added.
Mr Trump is seeking to bring down fuel prices ahead of November midterm elections in the US. He faces a career-low 32% approval rating, with just 17% of voters approving of his handling of the cost of living.
The G7 announcement followed feverish diplomatic activity in part triggered by Mr Trump’s threat to ban US exports of diesel, and to help reduce prices in Europe which are feeding into a growing cost-of-living crisis.
During the week, Mr Trump had threatened the ban if France and Germany did not release 120 million barrels of diesel from their stocks. That would have amounted to 40% of their overall reserves.
Following a call yesterday involving France, the European Commission, Ireland, Italy, Germany and the UK, there was an emergency meeting of the EU’s Energy Union task force this morning.
The Irish presidency of the European Union then called an emergency gathering of EU ambassadors for this afternoon, just around the time French president Emmanuel Macron had called a meeting of G7 leaders, including Mr Trump.
In a statement following that meeting, the group said it would coordinate maintenance across G7 refineries in order to prevent simultaneous shutdowns, while also urging countries with refining capacity to boost production.
“We will implement our commitments with a coordinated release through the IEA of 100 million barrels to begin immediately over four months, including a frontloaded substantial diesel release within the first 20 days by G7 members and partners,” said the statement, released by the office of French President Emmanuel Macron.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
G7 release only a ‘short-term’ measure – professor
A Professor of Sustainability at University College Cork has described the G7’s release of diesel and oil reserves as a “short-term” measure, adding that there will be a period of high oil prices across the globe.
Speaking on RTÉ’s Six One, Prof Brian Ó Gallachóir said the only way to alleviate the supply shock in the medium term is for the US and Israel to cease their attacks on Iran.
“It’s really a short-term measure. What they’ve agreed is to release 100m barrels of strategic reserves.
“That will be over a four-week period and there’ll be a particular front loading of diesel over the next 20 days. So, it is significant,” Prof Ó Gallachóir said.
He added: “Just to put that quantity into context, at the moment, the blockade at the Strait of Hormuz is blocking between 15-20m barrels every day in terms of really impacting and restricting the supply of oil.
“And that’s what’s causing these significant oil prices.
“So, to dampen down the prices in a longer-term way, I mean, essentially the US and Israel need to stop the attacks on Iran and enable the opening up of the Strait of Hormuz.”
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
Prof Ó Gallachóir said Ireland should reduce its dependence on oil, adding that it is “crippling us in terms of the cost of living crisis”.
“There’s going to be so much of the budget taken up with measures to dampen down the effects of what’s happening because of what’s happening geopolitically, but it’s linked to our dependence on oil.
“So, if we wean ourselves off oil, it puts us in a much stronger position to be able to plan more rationally going forward in terms of our energy costs,” he said.
However, Prof Ó Gallachóir said any short-term reduction in the price of oil will be tempered by damage to refineries in the Gulf from Iranian strikes during the war.
“Initially it was the flow of oil was what was blocked. But then with the attacks on both sides, we had attacks on infrastructure.
“So, the ability to refine the oil, to turn the crude oil into the things that we use, petrol, diesel and kerosene. Those things will really take time to recover.
“This short-term blip in terms of releasing the strategic reserves will certainly dampen down prices in the short term.
“But we are facing into a period of high oil prices and weaning ourselves off oil is really the only long-term strategy that we can pursue.”
Additional reporting Reuters, AFP
