Published in Newsroom.co.nz (Wellington), 6 October 2026
Donald Trump’s second term has given Europe one fight after another. Tariffs, Greenland, Ukraine, and Iran have all had their turn.
Last week, the Americans added one more: diesel. On Thursday, Reuters reported the Trump administration had told Germany and France to draw down their emergency diesel stocks “or face a potential US diesel export ban”. By Trump’s standards, it was a polite request.
Still, the European Commission was not amused, replying that such a ban “would undermine our trust in the United States as a reliable partner”, as though there were much trust left after Greenland. By Friday, the G7 had agreed to release 100 million barrels of crude and diesel regardless.
Trump was obviously pleased with himself. “I asked for it,” he told reporters. The export ban, he added, “was never really ever on the table”.
Brussels, meanwhile, insisted the release had “nothing to do with” American threats. As we would say in New Zealand, “Yeah, right”.
Now, you might think a trans-Atlantic quarrel over diesel is none of our business. But it very much is.
Part of New Zealand’s emergency fuel is a bundle of “tickets”, paper claims on oil in other countries’ storage tanks, under arrangements with Britain, Japan and the United States. Had Washington cut off Europe’s diesel, claims on American fuel would have looked far less secure.
That the struggle over fuel is back on the international agenda with a vengeance should surprise no one. Right after the Iran war began and Hormuz closed, panic about fuel supplies grew, but it subsided as countries coped.
Yet the underlying problem remains. Hormuz is still far from open, and other disruptions have piled on top. Frankly, none of this surprises me.
Since February I have been recording podcast conversations with retired Major General John Howard, New Zealand’s first chief of defence intelligence and later a deputy director at the US Defense Intelligence Agency. John has repeatedly warned that falling pump prices do not mean the crisis is over. In June, when I asked if we had been too gloomy, he said the problem had “accelerated towards us”.
Now it seems to have arrived.
What has caused it, and why is diesel so scarce? The Iran war did more than close Hormuz. It wrecked refineries across the Gulf, whose diesel exports in August were just over a quarter of their pre-war level.
Then there is Russia, where Ukrainian drones have hit refineries hard and Moscow has banned diesel exports. To make matters worse, China has suspended its fuel exports.
As for Europe, it stopped buying Russian diesel in 2023 and switched to the Gulf, only for the Gulf to go up in flames. So it turned to America, which now supplies about half of Europe’s diesel imports, according to the International Energy Agency. The trouble is, America is short too.
Its diesel hit a record $6.53 a gallon in September, five weeks before the midterms.
Hence Trump’s idea of banning diesel exports, despite his own interior secretary publicly admitting that a ban would not lower prices.
Europe’s emergency stocks hold about 290 million barrels of diesel and gasoil, mostly because of an EU rule that forces governments to keep much of their reserve as refined fuel. America’s federal diesel reserve holds a million barrels, less than it exports in a day.
Mind you, I have spent years arguing that Europe free-rides on American security, and it usually does. On diesel, though, the roles are reversed.
Europe was slow to release the emergency stocks it pledged in March. But at least it paid to keep diesel in reserve. Washington did not, and now it wants Europe’s reserves released to bring down American pump prices.
Looking at all this from New Zealand, it is hard to feel relaxed.
We buy all our diesel ready-made, about half of it from South Korea and most of the rest from Singapore. So, the price we pay is set in Asia, and Asia is short too.
South Korea capped its fuel exports in March, and since China suspended its exports, Australia, the Philippines and others have been chasing the same Korean and Singaporean barrels we need. Then comes the northern winter, when Europe’s demand for diesel peaks.
None of this means our tanks are empty. On 27 September, the country had 28.7 days of diesel on hand and more on the water. To its credit, the Government has also added a diesel reserve at Marsden Point.
Beyond that, we rely on the IEA, whose members must hold 90 days of oil imports, and we meet that obligation partly with those tickets. Government consultants called the ticket system “a compliance strategy” rather than real fuel security. Oil from a European ticket, officials reckon, takes roughly four to eight weeks to arrive.
The Government’s own fact sheet admits that the IEA system “relies on co-operation and shared interest, not enforcement”. Well, Washington has just shown it will look after its own pump price first.
That is why last week’s quarrel matters here. Europe had real diesel in real tanks, but it still gave way within 48 hours. In return, it got a G7 “commitment to refrain from export restrictions on energy and energy products between G7 countries”.
New Zealand is not in the G7, but the Government did the next best thing. In May, it signed an agreement with Singapore that commits both governments not to restrict exports of fuel and other essentials. Nothing comparable covers South Korea, which supplies half our diesel.
And if Europe can be pushed around like that, a small country holding paper claims on other people’s oil should not expect gentler treatment.
Our grandparents knew to keep something in reserve. We, it seems, keep part of ours as an option on someone else’s.
We sit at the receiving end of all this and can do little to shape it. But we could at least understand it and prepare. There are precious few signs of either.
Apart from NZ First’s promise of a $1 billion survey for oil and gas, fuel security has barely come up in the campaign.
We vote on 7 November, four days after the Americans. Their election is about the pump price. As for ours, we seem to be discussing everything but matters of national security.
