WASHINGTON/BRUSSELS/PARIS, Oct 1 (Reuters) - The Trump administration has told Germany and France to draw down emergency diesel inventories to help ease soaring global fuel prices or face a potential US diesel export ban, according to three people close to the discussions.
The warning marks an escalation in pressure on Europe as US President Donald Trump considers a potential ban to help bring down US fuel prices ahead of November’s midterm elections.
Yeah, except its not going to lower prices.
Trump consistently makes the error of thinking he can influence US oil prices. He can’t, the oil prices are set globally. The only thing that could possibly lower oil prices is to either restore global supply or subsidize oil.
America doesn’t have a shortage of fuel. But if Trump were to ban the export of oil regardless, then oil prices would rise significantly, followed shortly after by even more inflation and supply chain disruptions.
Its literally one of the dumbest things he could do, and he’s threatening to do it just weeks ahead of the elections that might already cost him his presidency.
Maybe we should just let him go ahead and do it. Between this and two more years of Trump-just-doing-crazy-shit, an oil supply disruption is probably the better option, if it helps to get his dumb-ass on a leash.
How come? My guess would be if the US producers of oil can’t sell abroad, they’d have to sell domestically, which would increase the supply, which would drive down the price (basic supply and demand).
Oil prices are set globally, which is why if the UK for instance opened a new oil field it wouldn’t lower prices in the UK (Despite what right wing press are saying regarding Rosebank and Jackdaw), but if you’re cut off from the global markets, won’t it have an impact?
My ban, the proposed ban concerns diesel fuel, not crude. That said though, it makes absolutely no sense for companies to sell diesel far below market value during a global oil crisis.
If companiea can’t export diesel at a reasonable price then the first action would not to be to cut prices domestically, but to try and cut production. Which then also impacts gasoline and kerosine prices.