Donald Trump has threatened to cut off US diesel supplies to Europe unless it releases its emergency diesel reserves. The warning comes after the average price of a litre of diesel in the UK hit a new all-time high on Wednesday of 199.72p amid the continuing conflict in the Middle East.
The Trump administration is now calling for tens of millions of barrels of fuel to be unlocked to lower pump prices for motorists. Britain joined crisis talks with European allies on Thursday after the US president threatened to choke off diesel exports to France and Germany, The Telegraph reports.
Push for wider ban
To help lower domestic fuel prices before the US midterm elections in November, Trump is pushing for a potential wider ban, signalling he might ask Europe to release strategic diesel reserves.
"We may do that. They have some diesel," Trump told reporters on a midterm elections campaign trip to Texas.
It is unclear whether the UK would be directly included in any threatened US export ban. However, Chancellor John Healey said that the UK is taking the threat of an export ban "very seriously", adding that the government was in discussion with the US over trying to stop a ban.
European response
UK officials held calls with counterparts in Germany, France, Italy and Ireland to discuss the possibility of tapping fuel stockpiles. The US energy secretary Chris Wright said he was "highly confident" Europe could help ease soaring global fuel prices by drawing down its emergency diesel inventories.
However, releasing more stocks would represent a problem for European countries, which need to balance the need to bring down domestic fuel prices with keeping high stocks for a potential worsening energy crisis over the winter if the Iran war continues.
Impact on UK prices
For the UK, a potential loss of US supplies would drive prices up sharply because Britain does not refine enough diesel to meet domestic demand. About a third of UK diesel imports last year came from the US.
Prime Minister Andy Burnham has vowed to lobby Trump for an exemption to any ban. But the UK is also understood to have agreed with European leaders to present a "united response" to the US demand.
Andrew Bowie, the shadow energy secretary, said Britain is forced to collaborate with Europe "because Labour have spent two years waging war on homegrown energy." He added: "Labour have spent two years taxing the North Sea into decline and refusing new licences, so Britain now finds itself at the mercy of decisions taken abroad."
The agreement comes after Burnham opened the door to a second referendum on rejoining the EU. Addressing the Labour Party conference earlier this week, the Prime Minister said: "Brexit has done more harm than good."
