Key facts
- Britain is discussing releasing emergency diesel stockpiles with European allies.
- The US administration has threatened to curb diesel exports to Europe.
- UK diesel prices reached a record high of 199.72 pence per liter on Wednesday.
- About a third of UK diesel imports last year came from the US.
- US Energy Secretary Chris Wright expects European announcements soon regarding new diesel supplies.
Britain is in talks with European allies over releasing emergency diesel stockpiles after the US administration threatened to cut off supplies of the fuel. UK energy secretary Miatta Fahnbulleh is in direct contact with her US counterpart, Chris Wright, over potential US protectionist trade measures that could curb diesel exports to Europe, potentially sending prices at the pump soaring.
The US warning, first reported by Reuters, marks an escalation of pressure on Europe as President Donald Trump considers a potential wider ban to help lower domestic fuel prices. A US official told Reuters: “It is in Europe’s best interest to work with the United States as we pursue multiple pathways to boost the supply of refined products and lower costs for consumers.”
Energy minister Martin McCluskey joined a call with EU commissioners on Thursday to weigh a collective response, and participants agreed “to maintain close contact” as events develop. The Trump administration has been frustrated with France and Germany for what it considers their not following through on commitments to release oil and petrol stocks.
Fuel stations across Europe are unlikely to run dry, because Europe produces about 70% of the diesel it consumes from domestic refineries and stores fuels in reserve. However, experts fear that competing for cargoes on the global market would lead to higher market prices. About a third of UK diesel imports last year came from the US, meaning any ban would choke off one of the country’s major sources of supply in an already starved global market.
The average price of a litre of diesel in the UK hit a new all-time high on Wednesday of 199.72p, according to the motoring body the RAC. Chancellor John Healey acknowledged earlier this week that UK diesel prices were “extreme” and said the government was in discussion with the US over trying to stop a ban.
The US war in Iran has disrupted energy supplies via the strait of Hormuz and sent the price of oil soaring. Brent crude – the international benchmark for oil prices – traded at about $72 a barrel in February, but was above $101 on Thursday.
Releasing more stocks would represent a problem for European countries, which need to balance the need to bring down domestic fuel prices with keeping high stocks for a potential worsening energy crisis over the winter if the Iran war continues. "The UK continues to need fuels – from transport to chemicals, agriculture and defence," said Elizabeth de Jong, the chief executive of the trade group Fuels Industry UK. The latest US threat showed the UK “cannot solely rely on overseas production for domestic energy security”, she added.