- EU energy commissioner Dan Jorgensen urged the US administration to maintain free flowing energy between the two blocs after President Trump said he would support a ban on American diesel exports. He warned that even with uninterrupted US supply, this winter could be the worst Europe has faced for energy prices since 2022.
- European drivers are already paying more than 30 euros extra to fill a diesel tank compared with before the US-Iran war, according to the NGO Transport and Environment. European natural gas prices recently reached their highest since the 2022 crisis that followed Russia full-scale invasion of Ukraine, and Brent crude remains above $100 a barrel.
- An official confirmed Friday that Jorgensen has instructed the Commission to examine a one-year postponement of rules requiring oil and gas importers to monitor and restrict methane emissions. He signalled further flexibility on climate requirements in the coming weeks and months, while maintaining that overall targets remain unchanged.
- Jorgensen said the likely outcome is very high prices rather than actual supply shortages, noting that availability is irrelevant to households that cannot afford the fuel. He urged member states to cut electricity taxes using fiscal flexibilities the Commission has introduced, and said only Italy and Greece have done so.
What Happened?
Traders have warned that a US export ban would be severely damaging for Europe, which relies on America as its largest diesel supplier, though US energy secretary Chris Wright has since questioned the merits of a full embargo. Increased output from US and European refineries has so far allowed EU countries to import sufficient diesel and jet fuel to avoid shortages. French President Emmanuel Macron called this week for immediate measures including postponing stricter methane import conditions and softening refining rules, and Jorgensen said Macron analysis is correct while declining to address individual proposals. He wants to raise the alarm before EU energy ministers meet in Dublin next week, and repeated that Europe must accelerate electrification, with the Commission proposing to double the electrification rate to 46% by 2040 alongside measures to tax electricity at a lower rate than gas.
Why It Matters?
The methane postponement is the most consequential item and it is buried well down the story. Europe is preparing to delay climate regulation because fossil fuel prices are high, which is a meaningful reversal and a clear signal to anyone pricing European regulatory risk: these rules bend under political pressure. For energy companies importing into the EU it lowers compliance costs in the near term and reduces confidence that the long-term framework will hold. Jorgensen frames this as flexibility without deviating from targets, but a one-year delay under price stress establishes the precedent that matters. His own diagnosis also clarifies what kind of crisis this is. He expects very high prices rather than shortages, which makes it an affordability problem rather than a security one, and affordability problems are addressed fiscally through taxes and transfers rather than through supply policy. That only Italy and Greece have used the fiscal flexibility already offered suggests the constraint is national budgets rather than Brussels. The structural vulnerability is the one nobody in Europe can fix. European energy security currently depends on a decision the US administration may take for reasons connected to November midterm elections, and analysts expect a cutoff would push prices higher worldwide. There is also an unresolved tension in the European position: postponing methane rules to ease costs works against the electrification agenda Jorgensen describes as the only permanent solution, so short-term relief is being bought at the expense of the transition he says prevents the next crisis.
What Next?
The EU energy ministers meeting in Dublin next week is the immediate event, and whether ministers agree coordinated measures or leave it to national budgets will determine how much relief arrives before winter. Watch for formal confirmation of the one-year methane delay and which other requirements are relaxed alongside it, since Jorgensen has signalled more to come. On the US side, whether an export ban is actually imposed and whether it carries a Jones Act waiver determines the scale of the European impact. Track European diesel and gasoil prices against the 30 euro per tank increase already recorded, and watch whether more member states follow Italy and Greece in cutting electricity taxes. The 46% electrification target for 2040 is the long-term commitment to measure these short-term decisions against.
Affected Tickers and Coins: BZ, TTE, SHEL, VLO
Source: Financial Times
