UK Consults Allies on Diesel Stocks Amid Trump Export Ban Threat
European nations discuss releasing reserves as the US administration pressures them to lower global fuel prices ahead of midterm elections.
Britain has engaged in urgent discussions with Germany, France, Italy, and Ireland, as well as the European Commission, regarding the potential release of emergency diesel stockpiles. These talks come in response to a threat from the Trump administration to impose a U.S. export ban on the fuel.
The warning from the U.S. represents an intensification of pressure on European countries, with President Trump reportedly considering the ban to reduce domestic fuel prices before the upcoming midterm elections. U.S. officials have expressed frustration, believing that France and Germany have not fully met prior commitments to tap into their emergency oil and fuel reserves.
"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," a U.S. official stated. Another source indicated that the U.S. has requested the European Union release 120 million barrels of diesel over the next six months. U.S. Energy Secretary Chris Wright has indicated expectations of upcoming announcements from Europe regarding new diesel supplies, citing disruptions to exports from the Middle East and China.
France and Germany have become increasingly reliant on U.S. fuel following their ban on Russian imports and disruptions from the ongoing conflict in the Middle East. In the United Kingdom, diesel prices reached a new record high on Monday, surpassing the previous peak set after Russia's invasion of Ukraine. The average price of a liter of diesel stood at 199.72 pence, more than 57 pence higher than at the beginning of the conflict.
The rising cost of diesel is attributed to the impact of the Russia-Ukraine conflict and renewed hostilities in the Middle East on global supplies. Russian diesel exports have significantly decreased after its oil refineries were targeted, leading to increased demand and higher wholesale prices from other exporting nations. The ongoing conflict in the Middle East has further disrupted the global trade of refined oil.
French President Emmanuel Macron is expected to convene a video conference of G7 leaders to address rising fuel prices and the global availability of refined products, including the coordination of reserve releases with the International Energy Agency. While Macron and Trump did not discuss the issue directly when they met recently, the broader international effort aims to stabilize markets.
Meanwhile, the cost of unleaded petrol in the UK has also been increasing, with the average price per liter reaching 174.54 pence. Motoring organizations are urging the UK government to extend the current 5 pence cut in fuel duty beyond its scheduled reversal at the end of the year. A decision on fuel duty is anticipated in the Chancellor's upcoming Budget speech. Separately, the chief executive of EDF Energy has warned of a potential second significant energy crisis in Britain due to geopolitical forces impacting prices.