Thank you, Donald! Twenty-lei diesel may be on its way
Donald Trump would help his allies with yet another brilliant idea: the American president supports a 90-day ban on U.S. diesel exports. The move could lower American fuel prices in the short term ahead of the November midterm elections, but it could trigger a historic price surge in Europe. According to a French analyst, quoted the price of diesel per liter could rise to as much as 3.90 euros, or roughly twenty lei.
The European Union is so vulnerable because in August, half of the diesel imported by EU member states came from the United States. America currently exports more than 1.5 million barrels of diesel per day, making it by far the largest supplier in the world. Meanwhile, Europe no longer has enough refining capacity to cover its own needs, and exports from the previously largest supplier, Saudi Arabia, have fallen due to the war in the Middle East. Trump's mere threat was already enough to push up the price of European diesel contracts by seven percent in a single day. The EU average price is currently 2.23 euros per liter, compared to 2.16 euros a week earlier. The European Commission has begun high-level talks with Washington and warned that the export restriction would be harmful to both sides.
Because, of course, Trump has once again managed to come up with a solution that would eventually hurt not only Europe but America as well. The export ban could temporarily push down American prices, but domestic demand in the United States cannot absorb the entire production. Refineries would therefore have to scale back operations, which would ultimately reduce American supply as well. According to an American oil industry executive, the ban could raise diesel prices in the United States by thirty cents per gallon in the longer term. The American oil industry is therefore fiercely opposed to the idea, but for Trump, it's not economic logic that matters right now, but the midterm elections. In agricultural states, fuel prices have nearly doubled, and a close race is expected in Iowa, so Republicans are trying to shave a few cents off the price of American diesel with a quick export ban. And the European allies will end up paying the difference.
Ugar
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