Diesel prices surge as Trump mulls 90-day US export ban

Diesel prices in Europe have surged after reports that Donald Trump is considering introducing a 90-day ban on US exports.

The Trump administration is drawing up plans to stop diesel being sent abroad that could be announced as soon as this week, Politico reported.

The White House dismissed the report as “fake news” but the price of European diesel jumping by as much as 7pc in the aftermath of its publication, while US prices tumbled by a similar amount.

The Trump administration is considering restrictions as surging prices at the pumps in the US increase concerns within the Republican Party about a backlash in the upcoming mid-term elections.

In unusual move, major US national energy associations urged Mr Trump to reject calls for a ban.

They warned an export bans would lead to “less fuel production, tighter supplies, and rising costs for American families, farmers, and truckers.”

Britain faces surging fuel prices and potential shortages if Mr Trump pushes ahead with “catastrophic” restrictions on US diesel exports, experts warned.

Such a ban would be hugely damaging to the UK because almost a third of the country’s diesel imports are sourced from the US. The UK imports more than half of its diesel from abroad.

Greg Newman, the chief executive of Onyx Capital, a London-based oil trader, said a US export ban would be “a disaster” and result in “much higher prices” at the pumps.

“Rising prices would act like a form of rationing, by destroying demand,” he said. “High diesel prices would hit haulage, farming and construction, impacting food and goods inflation.”

Adam Bell, a former energy department official and consultant at Stonehaven, said: “If a ban went ahead, it would lead to a significant tightening of the market.

“The question of whether you would have physical shortages as well would depend on what European refineries could ultimately do to max out their diesel production in the interim.”

Ashley Kelty, research analyst at investment bank Panmure Liberum, said it would take “a few weeks” for Britain to run down its diesel stocks but that prices at the pumps could quickly go “north of £2.50, £3” a litre before then.

Diesel currently costs an average of 197.31p a litre, according to the RAC.

Simon Williams, of the RAC, said: “With concerns over the global supply of wholesale diesel, the question facing drivers is no longer ‘when will the average price exceed 199.09p?’ but ‘how far above £2 a litre will it climb?’.”

Mr Kelty warned that higher fuel costs could have knock-on effects for supermarkets and shops, given the effect on trucking businesses that supply them.

“Obviously, that will be passed through to transport costs for businesses,” Mr Kelty said.

“You could see smaller hauliers potentially priced out of the market, which could lead to shortages of goods, certainly delays.”

Trade war beckons

The White House is divided on the idea of a diesel export ban, with Chris Wright, the US energy secretary, publicly criticising the idea on Wednesday.

At a Climate Week event, Mr Wright called it a “blunt tool” that “definitely doesn’t work” and could drive up the price of other key fuels, such as jet fuel and gasoline. Mr Wright instead floated the idea of a voluntary cap on exports that would still keep diesel flowing.

“I don’t think you will see a blanket ban on diesel,” Bloomberg reported the US energy secretary as saying.