Washington. Amid rising diesel prices in America, President Donald Trump made a big announcement on Friday. He said that European countries have agreed to release large quantities of diesel from their reserves. According to available information, G7, a group of seven major industrialized countries, has committed to release 100 million barrels of oil from the strategic reserves. It will start with the supply of diesel on a large scale. The US President said that the process of releasing diesel will be started immediately.
According to American Automobile Association (AAA) data, the national average price of diesel in the US reached a record high of $6.52 per gallon on September 22. On Friday it dropped to $6.37 per gallon. High fuel prices continue to put pressure on American consumers and the transportation sector.
France informed about plans to release oil
According to the French Embassy in the US, President Donald Trump spoke at night with G7 Chairman and French President Emmanuel Macron regarding rising fuel prices and availability of petroleum products. After this, Macron chaired the meeting of G7 leaders through video conference on Friday.
The responsibility of coordinating this initiative has been given to the International Energy Agency (IEA). France said in its statement that commitments to release 100 million barrels of oil through the IEA will be implemented immediately. This process will continue for four months. Under this, G7 members and partner countries will release large quantities of diesel in the first 20 days.
The move aims to increase the availability of petroleum products in the market and help ease pressure on fuel prices.
Pressure on Trump increases before midterm elections
Rising fuel prices remain a challenge for President Trump and his Republican Party before the mid-term elections in America in November. According to a new poll by AP-NORC, most American citizens hold Trump responsible for rising prices. The survey also showed a decline in his popularity rating over his management of the economy.
The increase in fuel prices is affecting the spending and transportation costs of common people. In such a situation, there is increased pressure on the government to take steps to control inflation and maintain energy supply.
Impact of Iran war and trade tensions
The prices of many commodities, including oil, have increased in the US amid the Iran war and trade conflicts. The prolonged conflict has increased uncertainty in the global energy market, which has impacted fuel prices in many countries including the US.
President Trump has consistently argued that the economic costs of war to prevent Iran from acquiring nuclear weapons are acceptable. He claims that fuel prices may come down after the conflict ends. However, there remains uncertainty about when the war will end and how long its impact on energy markets will last.
An attempt is being made to increase the supply in the market through the G7 initiative to release oil from the strategic reserves. However, how much and how soon this will bring relief in retail prices of diesel will depend on demand, supply and international market conditions.