Britain is in preliminary discussions with EU partners about releasing additional strategic fuel reserves, including diesel, if President Donald Trump proceeds with a threatened ban on US diesel exports. The talks come as diesel prices in the UK have reached record highs, with the average hovering just under 200p per litre this week.
Energy Minister Martin McCluskey spoke with European counterparts on Thursday about the possible US move and a co-ordinated response. A source familiar with the discussions told the BBC that it was prudent to prepare with other countries, including those across EU.
Trump has said he is considering restrictions on US diesel exports in an effort to bring down record fuel prices for American motorists. Asked about an export ban at the weekend, he said: "We're thinking about it very seriously".
The US exports between 1.2 and 1.5 million barrels per day of diesel. Any restrictions could further tighten supplies for import-dependent markets, including the UK, which has four refineries but lacks sufficient diesel production to meet national demand.
Those refineries make more than enough petrol to meet demand. Their diesel output falls short of the country’s needs, leaving Britain reliant on overseas supplies at a time of pressure across the global market.
According to the motoring organisation the RAC, diesel prices have reached an all-time high of 199.79p per litre, up from 142.38p. The rise affects a large vehicle fleet. Department for Transport figures show there were 15.1 million diesel vehicles on UK roads at the end of June, including 9.8 million diesel cars.
Supply has already been constrained by an export ban from Russia, another major diesel supplier. Prices for petrol and diesel worldwide have also risen sharply since the outbreak of the US-Israel war in Iran in February.
The closure of the Strait of Hormuz has added to those pressures. The waterway typically transports around a fifth of the world’s oil and gas, making disruption there important for fuel supplies and prices far beyond the region.
European countries still have reserves remaining from a co-ordinated release of strategic fuel stocks earlier in the year. The amount available for any further release, and the scale of action under discussion, have not been disclosed.
A European Commission spokesperson said there were "lots of calls, lots of meetings" under way on the diesel situation. The governing board of the International Energy Agency, which brings together countries on energy security issues, is due to meet tomorrow to address the crisis.
It remains unclear whether Trump will impose an export ban, when any restrictions might begin or how long they could last. The discussions between Britain, EU partners and the International Energy Agency are focused on preparing for a further supply shock while diesel prices remain at record levels.
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