Nicolai Haugsted
Europe sounds the alarm as Trump weighs restrictions on US diesel exports.
Donald Trump’s struggle with record diesel prices is no longer just an American political headache.
Pressure to bring fuel costs down before the midterm elections has pushed Washington toward increasingly dramatic ideas, including keeping more US-produced diesel at home. Trump himself has publicly backed that approach.
Europe is now watching closely — and Brussels does not sound particularly thrilled.
The European Union warned Thursday that reported plans for US diesel export restrictions could hurt markets on both sides of the Atlantic, while reminding Washington that major economic partners are generally expected to talk before somebody starts turning off the taps.
Europe would quite like a phone call first
European Commission spokesperson Olof Gill addressed the controversy after Politico reported that the Trump administration was preparing a 90-day halt to US diesel exports.
Brussels is concerned that restricting American supplies could create problems far beyond the United States.
“High-level contacts between the European Union and the U.S. administration are ongoing,” Gill told Reuters Thursday.
“We expect close partners to consult each other before taking measures that affect shared markets.”
Gill said disruption to US exports risked negative consequences for both economies.
Confusion surrounding the proposal starts with Trump himself. Speaking to reporters Tuesday, the president openly endorsed restrictions as he searched for ways to lower domestic diesel prices.
“I’ve said let’s not send out the diesel. We make a lot of diesel,” Trump said.
“I’ve called for it. I’ve called for it within my people.”
Treasury Secretary Scott Bessent said alongside him that officials were examining whether restrictions were feasible and whether a partial or complete ban could work.
US diesel prices have climbed above $6.50 per gallon as wars involving Iran and Ukraine have squeezed global supplies, creating another cost-of-living problem just weeks before Americans vote in the midterms.
Republican politicians from agricultural states have been among those pushing Trump to prioritize American consumers and temporarily restrict exports. Farmers and truckers are particularly exposed to higher diesel costs.
Then Trump’s energy secretary hit the brakes
Barely a day after Trump publicly embraced the idea, Energy Secretary Chris Wright delivered a considerably less enthusiastic assessment.
“The blunt tool of banning diesel exports definitely doesn’t work,” Wright said Wednesday.
His concern is that American refineries produce several fuels simultaneously. Keeping diesel trapped inside the United States could eventually fill available storage, forcing refineries to reduce production.
“If you can’t export the diesel that comes out of our refineries, you run out of places to store it, and you have to reduce US refining, which would put upward pressure on gasoline prices and jet fuel prices,” Wright said.
Such an outcome would be rather inconvenient for a policy whose entire purpose is to give Americans some relief from expensive fuel.
Wright instead said the administration had been discussing voluntary measures with refiners to increase the amount of diesel available domestically.
Politico subsequently reported that the administration was nevertheless moving toward a 90-day export ban.
The White House promptly denied it. A White House official described the report as incorrect, while Wright said a blanket prohibition was not being considered.
“What’s being discussed is what’s the most efficient way to get more diesel into the United States of America, and continue maximum flows of gasoline and jet fuel,” Wright said.
So Washington currently has several statements that do not fit together particularly neatly.
Trump says he has called for diesel exports to stop. Bessent says officials have examined whether restrictions could work. Wright says a flat ban would not work and is not under consideration. The White House says the reported 90-day plan is false.
Europe, meanwhile, has decided that the possibility is serious enough to respond publicly.
Europe already has a diesel problem of its own
Brussels has good reason to pay attention.
European diesel markets are already exceptionally tight after disruptions linked to the wars involving Iran and Ukraine. Wholesale diesel prices have surged, while lost supplies from major producing regions have left buyers scrambling for alternatives.
American exports consequently matter.
Further disruption from the United States could tighten an already strained international market, potentially driving European prices higher. Analysts have also warned that restrictions could eventually rebound on American consumers if they discourage US refinery production.
Markets have already demonstrated how sensitive they are to the debate.
US diesel futures dropped roughly 4% after the reported 90-day proposal emerged Wednesday, before the White House publicly denied that such a ban was being prepared.
Trump’s domestic problem goes international
Political logic behind export restrictions is fairly straightforward: keep more diesel in America and hope additional domestic supply pushes prices lower before voters go to the polls.
Energy markets are considerably less cooperative.
Fuel produced in Texas or Louisiana can affect prices in Europe, while European shortages can feed back into global prices paid by American consumers. Wright’s objection is essentially that squeezing one part of that system could create an expensive bulge somewhere else.
Brussels has now added another consideration for Trump.
Any attempt to give American drivers, farmers and truckers cheaper diesel could leave one of Washington’s biggest trading partners competing for fewer barrels.
Europe’s request for consultation therefore arrives before Washington has even established whether there is officially anything to consult about.
