Diesel is near record highs, and President Trump has spent weeks pressing America’s allies to do more about it. On Friday, they gave in.
The Group of Seven nations agreed on October 2 to release up to 100 million barrels of oil and diesel from their emergency stockpiles, the Associated Press reported. A big share of the diesel is set to reach the market within 20 days, with the rest released over four months.
Trump endorsed the deal on social media and said the release would begin “immediately,” according to the AP.
Why diesel matters to everyone
Diesel moves almost everything Americans buy. It powers the trucks that stock grocery stores, the tractors on family farms and the trains that haul freight. When diesel jumps, the price of nearly everything follows.
The national average for diesel hit $6.37 a gallon, the AP reported, after setting a record of $6.52 on September 22. Regular gasoline was averaging $4.38 a gallon as of Saturday, down from $4.49 a week earlier, according to Fox News.
The spike has several causes, according to the AP: the war with Iran, blocked shipping routes out of the Persian Gulf, and Russian fuel export bans after damage to its refineries.
Allies were dragging their feet
This is not the first emergency release. After the Iran conflict began, the major economies pledged about 400 million barrels in March, Bloomberg News reported. But many allies were slow to deliver.
By the time of this week’s deal, about a third of that March release had still not reached the market, according to Bloomberg News. Germany had released only 23% of the stocks it pledged. Spain had released about a third.
Trump pushed European allies to move faster and threatened to restrict U.S. diesel exports if they did not, Bloomberg News reported.
In the end, Trump got what he wanted without pulling the trigger. “We’re not going to be doing the export ban,” he said, according to the AP.
French President Emmanuel Macron said the allies “are all committed to ensuring there are no export bans,” Bloomberg News reported.
America’s share
The United States will contribute 40 million barrels from the Strategic Petroleum Reserve, which completes its earlier commitment, according to Bloomberg News.
Markets reacted quickly. European diesel futures fell after the news, and the premium of European diesel over crude oil dropped to $69 a barrel from $76.77, Bloomberg News reported.
How much relief?
Don’t expect miracles at the pump. One energy analyst told the AP the release could lower prices by 25 to 50 cents a gallon after a few weeks.
The bigger factor is the war itself. Trump said this week that 18 U.S. service members have been killed in the conflict with Iran, Fox News reported. He predicted the war would end “very soon,” and said oil prices will then “come tumbling down.”
The bottom line
Trump used American leverage to get allies to do their share, and it worked. For months, Europe made promises and then sat on its reserves while American families paid more for food, freight and fuel. One credible threat to keep American diesel at home got them moving in a matter of weeks. That is what “America First” looks like in practice: our allies are welcome partners, but they don’t get a free ride.
Still, emergency stockpiles are a bandage, not a cure. Releasing reserves buys time. It doesn’t add new oil or new refining capacity. The lasting answer is more American production, more American refineries and fewer barriers to building them, so that a war on the other side of the world can’t put a family farm or a small trucking company out of business.
Until then, self-reliant households can protect themselves. Keep your vehicles maintained, combine trips and, if you rely on diesel for a farm or business, lock in supplies when prices dip. Relief is on the way, but it is wise not to count on it.