The UK is in talks with EU partners to release additional strategic diesel reserves if needed, after President Donald Trump threatened to ban US diesel exports to ease record pump prices at home. European officials are also weighing a coordinated response, while UK diesel prices have already hit an all-time high.
UK and EU coordinate on reserves
Energy Minister Martin McCluskey held a call with European counterparts on Thursday to discuss the potential US export ban. A source familiar with the discussions said it was prudent to prepare a coordinated response with other countries, including those across the EU, though some European reserves remain from an earlier coordinated release of strategic fuel stocks.
Separately, the EU's energy commissioner, Dan Jørgensen, held talks on Thursday with officials from France, Germany, the UK, Italy and Ireland to coordinate a joint response to the US threats, though no decision on a release was taken. A European Commission spokesperson said the two sides were holding numerous calls and meetings, including high-level contacts with the US administration.
Diesel prices already at record highs
UK diesel prices are hovering just under 200p per litre, according to the RAC, with average pump prices at 199.79p, up from 142.38p. The US is a vital supplier of diesel to the world, exporting between 1.2 and 1.5 million barrels per day, and experts warn a ban on shipments abroad could add further pressure on prices elsewhere.
According to BBC News: "We're thinking about it very seriously," Trump said of a potential export ban at the weekend. He has argued that keeping surplus barrels in the US would lower pump prices domestically ahead of the midterm elections. But David Fyfe, chief economist at Argus Media, said cutting off American supply would likely cause international prices to skyrocket.
The US administration has reportedly asked the EU to release 120 million barrels over six months, and Europe may hold up to 400 million barrels of diesel in commercial inventories and stockpiles that could be tapped to bring down global prices.
Demand is hard to shift
Diesel prices have skyrocketed globally since the outbreak of the US-Israel war in Iran in February, after the closure of the Strait of Hormuz, which typically carries around a fifth of the world's oil and gas. An export ban from Russia, also a major diesel supplier, has added further pressure on prices.
The fuel is harder to refine than gasoline, and because it is used across haulage and agriculture, demand is difficult to reduce. The UK's four refineries make more than enough petrol to meet demand but not enough crude oil-derived diesel, leaving the country reliant on imports even as the number of diesel vehicles on UK roads continues to fall.
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