US Considers Diesel Export Ban Amid Global Shortage, Pressures Europe to Release Reserves

Donald Trump has indicated he may request European countries to release some of their diesel reserves as he contemplates a ban on US exports of the fuel due to a global shortage. This statement follows Treasury Secretary Scott Bessent's call for Europe to prepare and release such supplies, asserting that US farmers, truckers, and businesses should not bear the burden of rising prices. The US has threatened to restrict diesel exports as costs surge, a situation exacerbated by the ongoing conflict in Iran. This issue is particularly significant for US voters ahead of the midterm elections. On Thursday, the UK engaged in discussions with European partners regarding the potential release of diesel reserves in response to any export ban. The US is a key supplier of diesel, exporting between 1.2 and 1.5 million barrels per day, and experts warn that a ban could further elevate prices in other countries. "We're thinking about it very seriously," Trump stated regarding the export ban. He reiterated his suggestion for European countries to release their diesel reserves, while Bessent emphasized the need for immediate action. UK Energy Minister Martin McCluskey participated in talks with European counterparts to address the potential ban. A source familiar with the discussions indicated that a coordinated response with other countries, including those in the EU, would be prudent, although European reserves remain from a previous coordinated release of strategic fuel stocks. A government spokesperson reassured that there is no immediate concern regarding diesel shortages, although prices are expected to rise. Diesel prices in the UK reached record highs, nearing 200p per litre, according to the RAC. The global surge in petrol and diesel prices has been attributed to the US-Israel conflict in Iran, which has affected oil transport through the Strait of Hormuz. Additionally, an export ban from Russia, another significant diesel supplier, has contributed to rising prices. Trump has argued that retaining surplus diesel in the US could lower domestic pump prices, providing relief to consumers ahead of the elections. However, David Fyfe, chief economist at Argus Media, cautioned that restricting American supply could lead to a spike in international prices. The RAC reported that diesel prices in the UK have reached an all-time high, with average pump prices at 199.79p per litre, up from 142.38p. Diesel is more challenging to refine than gasoline and is critical for the haulage and agricultural sectors, making demand reduction difficult. The UK relies heavily on imports for diesel, as domestic refineries do not produce enough to meet the country's needs. As of June, there were 15.1 million diesel vehicles on UK roads, a decrease from 15.7 million the previous year, with diesel cars also declining from 10.4 million to 9.8 million.