By Jarrett Renshaw
Sept 29 (Reuters) – The White House has urged the European Union to draw down emergency diesel inventories in an effort to lower global prices, as President Donald Trump and his administration pursue a range of options to ease fuel costs ahead of November’s midterm elections, according to two sources familiar with the effort.
The White House is frustrated that some European countries have not lived up to commitments made earlier this year to tap their emergency oil and petroleum reserves to help address supply disruptions and price spikes stemming from the Iran conflict and disruptions to shipping through the Strait of Hormuz, according to the sources.
US officials are particularly frustrated with France and Germany, which they believe have fallen short of their commitments, and have raised their concerns with the International Energy Agency, which coordinates emergency oil stockpile releases among member countries, according to the sources.
Washington agreed in March to loan 172 million barrels of oil from the SPR as part of a wider deal with about 30 countries in the International Energy Agency to release 400 million barrels from reserves around the world. EU countries agreed to jointly contribute 20% of the oil stocks release.
In announcing a new release of oil from US reserves, Energy Secretary Chris Wright publicly pressed European countries to fulfill their commitments, saying on Tuesday that while the US and Japan were delivering on theirs, “several European member countries have released only a fraction” of the crude oil and petroleum products they had pledged.
Soaring diesel prices have become a political headache for Trump and Republicans, particularly in farm states where the fuel is critical to agriculture, trucking and manufacturing.
With Republicans facing pressure to address the cost-of-living squeeze before the elections, the administration is considering a range of measures to bring prices down, including encouraging foreign stockpile releases, restricting US diesel exports and working with refiners to increase domestic supplies.
EU Energy Commissioner Dan Jorgensen said on Tuesday that the bloc had discussed with International Energy Agency Executive Director Fatih Birol whether to release more emergency oil stocks but had not decided whether to urge member states to do so.
“We still have to have talks amongst the member states and IEA on these issues,” Jorgensen told reporters, adding that the EU had to balance the need to ease price spikes against preserving emergency stocks for potentially worse supply disruptions.
The EU did not immediately respond to requests for comment on US allegations that members were not living up to commitments.
The EU has not disclosed the total volumes its members have so far released, although the IEA has said EU countries’ contributions will primarily take the form of refined products, rather than crude oil.
The White House did not immediately respond to a request for comment.
The administration’s approach to the diesel crunch remains unsettled. Trump has publicly backed a ban on US diesel exports, but administration officials have spent the past week exploring alternatives that could boost domestic supplies without imposing a blanket ban, including seeking voluntary export limits from refiners and allowing broader sales of tax-exempt red-dyed diesel. No final decisions have been made, according to the White House.
(Reporting by Jarrett Renshaw in Washington; Additional reporting by Kate Abnett in Brussels and Arathy Smoasekhar in Houston; Editing by Nathan Crooks, Timothy Gardner, Liz Hampton and Daniel Wallis)
