EU economy chief doubtful Russian diesel exports will affect prices

EU Chief Economist Valdis Dombrovskis expressed skepticism about whether Russia could supply enough diesel to impact global prices, stating that the volumes are unlikely to have a significant macroeconomic impact. The US recently authorized Russian diesel sales, following a deal between US President Donald Trump and Russian President Vladimir Putin, aimed at lowering oil prices following the Iran war.

Dombrovskis noted doubts about Russia's capacity to meet the agreed volumes and its adherence to US quality standards. During the IMF-World Bank Annual Meetings in Bangkok, the EU economy chief addressed various topics, including soaring sovereign bond yields in Europe, concerns about inflation due to rising energy prices, and a trade deal with China.

He highlighted the need for rebalancing in EU-China relations, as the two countries have a €360 billion trade deficit. The EU plans to cap hybrid vehicle imports from China at 350,000 per year starting in 2027. Dombrovskis emphasized the importance of addressing uncertainty, particularly in France, where the yield on 10-year government bonds has risen to near five percent, prompting the need for clarity on the country's budget.