As prices of diesel surge globally, former US President Donald Trump is considering a ban on the export of this crucial fuel from the United States. The move comes amid rising tensions due to the conflict in Iran, which has impacted oil supplies, prompting a sharp increase in fuel costs ahead of significant midterm elections in November.
US Officials Urge Europe to Act
US Treasury Secretary Scott Bessent has called on European nations to prepare for the release of their diesel reserves. He emphasised that American farmers, truckers, and businesses should not bear the brunt of escalating prices. Bessent expressed that Europe should expedite the delivery of their committed supplies and provide additional reserves to counteract ongoing disruptions.
UK and European Reactions
On Thursday, UK Energy Minister Martin McCluskey held a call with European counterparts to discuss potential responses to a US export ban. Although the UK, alongside its European partners, is planning for a coordinated response, the government reassured that the diesel supply is diverse and resilient, with no immediate cause for alarm about shortages. However, prices are expected to keep rising.
Sources stated that existing European reserves, released earlier this year from strategic stockpiles, could still be called upon. Meanwhile, a European Commission spokesperson noted the extensive communications and meetings occurring with US officials regarding the situation.
Global Impacts and Concerns
The possibility of the US curtailing diesel exports, which range between 1.2 and 1.5 million barrels daily, adds pressure on worldwide supplies. Financial experts warn that such a move could exacerbate global price increases. Additionally, Chinese restrictions on certain fuel exports in October are likely to intensify the existing challenges.
US President Trump has argued that retaining excess diesel within the country could reduce domestic fuel prices and offer voters some relief before the elections. However, experts like Argus Media’s chief economist, David Fyfe, believe halting American diesel supplies would cause international prices to surge further.
The UK fuels industry remains under strain as diesel prices had reached a record high of 199.79p per litre this week, a significant rise from 142.38p a year ago. Despite having sufficient petrol production capacity, the UK remains heavily reliant on diesel imports, with 15.1 million diesel vehicles on the road as of June. These factors combine to highlight the intricate dynamics at play in the current fuel market, which are being closely monitored by governments and industries worldwide.
Reporting based on coverage first published by bbc.co.uk.