3 hrs ago
Trump diesel threat and India tariffs imperil Europe’s fuel supply
The United States is thinking about stopping diesel exports for 90 days.
Diesel is an important fuel used by trucks, businesses, and other vehicles.
Europe already has unusually low diesel supplies before winter begins.
Europe gets a large amount of diesel from the United States and India.
A new US law could also place very high tariffs on countries that buy energy from Russia.
India buys a large amount of Russian oil and also sends refined fuel to Europe.
If India faces tariffs, it might change where it buys oil or how much fuel it exports.
European officials are worried that both actions could make diesel more expensive and harder to find.
Some US officials oppose an export ban because they say it could raise prices for gasoline and jet fuel inside the United States.
President Donald Trump said the United States is seriously considering a 90-day diesel export ban.
European diesel prices and demand pressures are rising as inventories approach record lows before winter.
The United States supplied 420,000 barrels per day of diesel to the European Union and United Kingdom last month, according to Kpler data.
A new US law allows tariffs of up to 100% on countries buying Russian energy, potentially including India.
European officials warn that a US diesel ban and disruptions to Indian supplies could worsen the region’s fuel shortage.
- Who
- The administration of President Donald Trump, European governments, India, and buyers of Russian energy are central to the dispute.
- What
- The United States is considering a 90-day diesel export ban while gaining authority to impose tariffs of up to 100% on countries buying Russian energy.
- Where
- The potential measures involve the United States, Europe, India, Russia, and global shipping routes including the Strait of Hormuz and Bab-el-Mandeb.
- When
- Trump discussed the diesel ban recently; the tariff law is scheduled to take effect within 30 days of signing, while Europe is approaching peak winter demand.
- Why
- The proposals are linked to high US diesel prices, the November midterm elections, efforts to pressure Russia, and concerns over disrupted global energy supplies.
Supports or considers restrictions
Opposes or questions restrictions
US diesel export ban
Supports or considers restrictions
Donald Trump said the administration was considering a 90-day ban to address high domestic diesel prices and protect US fuel supplies.
Opposes or questions restrictions
Energy Secretary Chris Wright said a ban would not work and could raise gasoline and jet-fuel prices; Interior Secretary Doug Burgum warned of possible retaliation from fuel-exporting countries.
Tariffs on Russian-energy buyers
Supports or considers restrictions
Supporters of the new law can use tariffs of up to 100% to pressure countries such as India to reduce purchases of Russian energy.
Opposes or questions restrictions
India says its Russian oil purchases are necessary for energy security and has warned that the measure could affect both bilateral relations and international energy markets.
Impact on Europe
Supports or considers restrictions
US restrictions and sanctions could be viewed as efforts to limit Russian energy revenue and respond to supply disruptions.
Opposes or questions restrictions
European officials and analysts warn that restricting US or Indian fuel supplies could deepen shortages, raise prices, and threaten supplies during winter.
Key facts
- Proposed diesel restriction
- A 90-day US diesel export ban is being considered, but no final timeframe or details have been announced.
- US diesel supply to Europe
- Kpler data cited in the article says the United States supplied 420,000 barrels per day to European Union countries and the United Kingdom last month.
- US diesel price
- Average US diesel prices reached $6.52 per gallon, up at least 76% year-on-year, according to AAA figures.
- Potential tariff
- The new US sanctions law allows tariffs of up to 100% on countries buying Russian energy.
- India’s Russian oil imports
- India’s imports of Russian crude reached 2.6 million barrels per day in June, according to trade data cited by Reuters.
- India’s role in European supply
- Vortexa data cited in the article says India accounted for 60% of diesel transiting the Bab-el-Mandeb route in August.
- European concerns
- European officials said a US diesel export disruption could negatively affect both Europe and the United States.
Quotes
India’s Ministry of External Affairs
India’s government ministry responsible for foreign affairs
“India remains firmly committed to ensuring energy security for its 1.4 billion people. It will continue to do so through diversified sourcing and on the basis of evolving market dynamics. This issue has been discussed at high levels in recent months with various US interlocutors.”
financialexpress.com
“The European Union views with concern the report that the US plans to ban diesel exports, including to the European Union. Any disruption would risk negatively impacting both sides”
financialexpress.com
Chris Wright
US Energy Secretary
“The blunt tool of banning diesel exports definitely doesn’t work. 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.”
financialexpress.com
Sources
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