Reserve talks between the UK and the EU

Britain has started discussions with European Union countries about diesel reserves amid concerns that a possible U.S. curb on diesel exports could tighten global supply. According to BBC reports, the contacts include possible coordination on releasing additional strategic fuel stocks, including diesel, if necessary.

Donald Trump said he was considering a ban on diesel exports in an effort to rein in record pump prices in the United States. Trump also said he could ask European countries to release some of their own diesel stocks.

What would a coordinated response involve?

UK Energy Secretary Martin McCluskey discussed the possible consequences of a ban with his European counterparts on Thursday. A source close to the talks said Europe still has reserves after the coordinated release of strategic fuel stocks earlier this year, but that preparing a joint response would be a prudent step.

What risks are pushing diesel prices higher?

The U.S. is a key supplier in global diesel trade, exporting 1.2 million to 1.5 million barrels a day. Experts say any interruption to that flow could add price pressure in other countries and trigger another spike in international markets.

In Britain, the average diesel pump price rose to a record 199.79 pence this week. RAC data show that figure is far above the previous level of 142.38 pence.

  • Energy prices surged after the war between the U.S. and Israel and Iran that began in February.
  • Any closure of the Strait of Hormuz, which carries about one-fifth of the world’s oil and gas, made refined fuels more expensive.
  • Russia’s diesel export ban has also increased pressure on global supply.

Why is the UK more exposed to supply risks?

The UK government says there is currently no reason to fear an imminent diesel shortage, but it warns that prices could rise further. A government spokesperson said the country has a diversified supply structure and remains in contact with international partners.

Even so, Britain remains heavily dependent on imports for diesel. Although the country’s four refineries can produce enough petrol to meet demand, they fall short of producing the volume of diesel the UK needs.

Demand is also relatively hard to curb. Diesel is widely used in transport and agriculture, making it difficult to reduce consumption quickly; as of the end of June, there were 15.1 million diesel vehicles on UK roads, including 9.8 million diesel cars.