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Why is the U.S. export move in the spotlight?

U.S. President Donald Trump said he could ask European countries to release part of their diesel inventories onto the market, while also keeping open the option of restricting fuel shipments from the U.S. A possible diesel export ban has further clouded price expectations, especially in the import-dependent United Kingdom and across Europe.

The comments came as diesel pump prices in the United Kingdom hit record levels this week. The Trump administration is signaling that it is considering keeping supply at home to ease pressure on U.S. drivers, truckers and businesses facing rising fuel costs ahead of the November midterm elections.

Donald Trump said of Europe’s reserves: "We could do that. They have some diesel."

U.S. Treasury Secretary Scott Bessent also argued in a social media post that Europe should bring its own stocks into use immediately. UK Energy Secretary Martin McCluskey reportedly discussed the potential ban with European counterparts on Thursday, while the European Commission was said to be in close contact with the U.S. administration.

Why are the UK and European markets vulnerable?

The United Kingdom relies heavily on imported diesel. More than half of the diesel used in the country is imported, and 31% of those imports come from the U.S. The Netherlands and Belgium together account for more than a third of UK diesel imports.

What do the numbers show?

  • The average UK diesel pump price rose to 199.79 pence per litre, up from 142.38 pence previously.
  • The U.S. exports 1.2-1.5 million barrels of diesel a day to the global market, with much of it going to Latin America.
  • The EU’s emergency crude oil and fuel stockpile is about 109 million tonnes, roughly one-third of which consists of diesel and similar products.
  • International Energy Agency rules require members to hold reserves equal to 90 days of net oil imports, while EU rules call for stocks equal to 61 days of domestic consumption.

Cutting diesel demand does not look easy either. Because the fuel is used extensively in transport and agriculture, consumption is relatively inelastic; and although the UK’s four refineries can meet petrol demand, they cannot fully cover the country’s diesel needs. As of the end of June, there were 15.1 million diesel vehicles in the country.

What is squeezing global supply?

The pressure in the market is not coming from the U.S. alone. Sanctions after Russia’s invasion of Ukraine pushed Russian diesel toward markets outside Europe, while recent attacks on Russian refinery capacity by Ukraine have also affected supply. The war in Iran has weakened flows of crude oil and refined products from the Middle East, while any closure of the Strait of Hormuz — through which about one-fifth of the world’s oil and gas normally passes — has pushed prices higher.

That has been compounded by Russia’s export ban and reports that Chinese refiners stopped exporting some fuel products for October. Argus Media chief economist David Fyfe warned that a disruption to U.S. supply could drive international prices sharply higher. The UK government says supplies are diversified and resilient, that there is no immediate concern about physical shortages, but that prices could still rise further.

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