Key takeaways: The Trump administration is pressing European nations to release diesel reserves, arguing that American consumers and businesses should not bear the burden of a global supply disruption alone. Although fuel prices remain elevated, oil flows through the Strait of Hormuz have partially recovered, and Trump's stance on imposing a US diesel export ban has cooled. European Union countries are set to hold crisis talks over the surge in diesel prices, with officials warning that a US export ban would damage Europe's economic outlook.

The Trump administration is pushing European countries to urgently release part of their diesel reserves, saying that American farmers, truckers and businesses should not be left to absorb the consequences of a global energy supply disruption on their own. The stance comes as US President Trump weighs whether to impose a diesel export ban in a bid to curb soaring energy prices.

Data from the American Automobile Association (AAA) show the average US diesel price soared to a record high of $6.50 a gallon at the end of last month amid supply disruptions caused by the Iran war and the Russia-Ukraine conflict, a sharp year-on-year increase. US Treasury Secretary Scott Bessent said in a post on X on Thursday that America's European partners "should accelerate the commitments they have already made and release additional supply immediately to address the ongoing supply disruption." He added: "The US has done its part and expects allies to turn commitments into concrete action."

With the November midterm elections approaching, the US government faces growing domestic political pressure to deliver a solution to surging fuel prices. Speaking to reporters in Texas on Thursday, Trump said he "might" ask European countries to release diesel reserves. He had previously said he was considering a diesel export ban, but as oil shipments through the strategic Strait of Hormuz have partially recovered, his tone on the ban has turned noticeably more cautious this week. Trump said on Wednesday he is still "looking at" banning diesel exports but acknowledged the move could have a "negative impact" on gasoline supply.

EU to hold crisis talks

As the world's largest diesel exporter, the US would draw strong opposition from its domestic energy industry and deep concern across the Atlantic if it imposed a full diesel export ban. International Energy Agency data show that about half of the EU's diesel imports in August came from the US, underscoring the bloc's vulnerability to a US export ban. EU member states are scheduled to hold crisis talks on Friday to try to form a coordinated response to the diesel price surge.

EU Trade Commissioner Maros Sefcovic, attending the G20 trade ministers' meeting in Milwaukee, said he had discussed diesel supply and the price surge with US Trade Representative Jamieson Greer. According to reports, Sefcovic said: "Whether it is diesel or other oil and gas products, we have every reason to work together to bring prices down." He also said that if the US took steps to restrict diesel exports, it would catch the EU by surprise and would have a negative impact on Europe's economic outlook.

'A global energy crisis'

Macquarie energy strategists said on Thursday that the US position on the global diesel crisis has a global perspective, which is not hard to understand. Macquarie analyst Walter Chancellor wrote in a research note: "The core issue facing the US is not simply a diesel shortage, nor merely a refined products problem, nor even entirely a problem for the oil industry itself. This is essentially a global energy crisis." "So what is the solution? Simply put, getting more oil out of the Middle East through the Strait of Hormuz. Anything short of that is like rearranging deck chairs on the Titanic and treating the symptoms rather than the root cause."

The Strait of Hormuz is a key conduit for global oil trade. Shipping through the strait was disrupted after US and Israeli strikes on Iran in late February this year, while this week daily oil exports through the strait have shown signs of recovery.