Europe’s least-bad diesel plan: release more of it
USO•Europe is weighing a French proposal to release about 50 million barrels of diesel, alongside related crude releases, as the United States presses the region to draw down fuel reserves. The column argues Europe could release all 92 million barrels pledged under an International Energy Agency plan, plus perhaps more.
1. French proposal under discussion
European countries discussed a French proposal to release 50 million barrels of diesel, with International Energy Agency members also releasing 50 million barrels of crude oil. The proposal comes as US officials urge Europe to draw down emergency diesel inventories and have threatened a possible US diesel export ban.
2. Reserves and price risks
Europe’s diesel imports from the United States made up 41% of its imports in September, while Oxford Economics estimates a US export ban could raise European wholesale diesel prices by 40%. The column says a US request for Europe to release 120 million barrels would be excessive, representing 40% of the region’s diesel and gasoil stock.
3. A middle-ground option
The column suggests Europe coordinate the release of all 92 million barrels pledged under the IEA’s March plan, possibly with additional supplies. It says the French proposal for 50 million barrels of diesel, along with related crude releases, seems closer to an appropriate level.
