US tells Germany and France to release stockpiles or face ban
Martin McCluskey, the UK minister for local energy, joined counterparts from the European Commission, Germany, France, Italy and Ireland on Thursday to discuss drawing down emergency diesel reserves, after the Trump administration warned it could cut off US fuel exports unless European countries release their own stockpiles. A UK government spokesperson said it has “a diverse and resilient supply” and “continues to engage with our international partners and the UK fuel industry.”
The Trump administration’s warning, first reported by Reuters, marks an escalation of pressure on Europe as Trump weighs a wider US diesel export ban aimed at lowering domestic fuel prices before the November US midterm elections. A US official told the news agency: “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.”
The Trump administration has been frustrated with France and Germany for what it considers their failure to follow through on earlier commitments to release oil and petrol stocks. US energy secretary Chris Wright said on Wednesday that the administration expected announcements from Europe “soon” regarding new diesel supplies. “We’ve lost some diesel exports from the Middle East, although we’re restoring those, and we’ve lost diesel exports from China,” Wright said. “So that’s a lot of interruptions.”
The UK’s energy secretary, Miatta Fahnbulleh, has been in contact with Wright to raise concerns about a potential ban. Healey, the chancellor, admitted earlier this week that UK diesel prices were “extreme” and said the government was in discussion with the US to try to stop a ban.
The pressure comes as UK diesel prices hit a new all-time high. The average price of a litre of diesel reached 199.72p on Wednesday, according to the motoring body the RAC. The UK’s vulnerability stems from its limited domestic refining capacity — about a third of UK diesel imports last year came from the US.
It remains unclear whether the UK would be included in any US export ban. But the loss of US supply would drive prices up sharply at UK pumps because Britain does not refine enough diesel to meet domestic demand.
Across Europe, fuel stations are unlikely to run dry because the continent produces about 70% of the diesel it consumes from domestic refineries and holds fuel in reserve. But experts warned that competing for cargoes on the global market would push prices higher for countries that lose access to US supply.
Brent crude, the international oil price benchmark, traded at about $72 a barrel in February before the Iran war. It was above $101 on Thursday, with the conflict disrupting energy supplies through the Strait of Hormuz.
Elizabeth de Jong, the chief executive of the trade group Fuels Industry UK, said: “The UK continues to need fuels — from transport to chemicals, agriculture and defence.” The latest US threat showed the UK “cannot solely rely on overseas production for domestic energy security,” she added.
Trump has said he is “very seriously” considering a US diesel export ban to curb soaring prices, and has urged Ukrainian president Volodymyr Zelenskyy to pause strikes on Russian oil refineries over concerns they could push prices up further. Russia has already extended its own ban on diesel exports until the end of October following Ukrainian attacks on its refining companies.
Releasing more stocks would present a dilemma for European countries, which must balance the need to bring down domestic fuel prices against maintaining high stocks for a potentially worsening energy crisis over the winter if the Iran war continues.