UK diesel hits a record 198.32p a litre as Trump’s export-ban threat unsettles Europe

The average price of a litre of diesel at UK pumps stands at 198.32p, according to the RAC motoring body, an all-time high^5,6. The Guardian reported the record as approaching £2 a litre⁹. The RAC attributed the rise to disruption of global oil supplies caused by the war with Iran⁵.

President Donald Trump has again threatened to ban US diesel exports¹. The United States is the world’s biggest diesel producer and exporter, and the threat has put buyers on alert¹. Britain is in talks with Washington to stop the ban, John Healey said³.

European officials are more sanguine. EU officials said they were confident Trump would drop the plan, citing Energy Secretary Chris Wright, who has said a ban would not work and would not be in anyone’s interests^12,13. Energy Commissioner Dan Jorgensen welcomed those comments^10,13. Trump earlier this month appeared to endorse temporarily blocking exports¹². The White House is separately weighing red-dyed diesel tax relief to lower fuel prices, with Wright contacting refiner executives about it¹⁴.

Why it matters to investors

Diesel powers trucks, farms and industry, so its price sets a marginal cost across the goods economy². Prices are rising because of refinery disruptions, supply shortages and geopolitical tension at once², and UK industry is absorbing the increase on top of already high energy costs and supply chain disruption⁷.

Goldman Sachs argued that a US export ban would cut prices inside the United States but raise them in Europe, compressing US refining margins and giving American refiners an incentive to cut output¹⁵. Goldman’s oil research head Daan Struyven described the effects of a ban as arriving in three distinct periods¹⁶.

The macro cost is already quantified. The Financial Times reported that the US-Iran war has added €100 billion to the European Union’s fuel bill¹¹, and European Central Bank estimates suggest a geopolitical oil supply shock could reduce euro-area real GDP growth by around 0.4 percentage points⁸.

What to watch

The decisive variable is whether the export ban moves from threat to policy. The gap between Trump’s endorsement and his energy secretary’s scepticism is the whole trade^12,13.

The second is demand destruction. UK mortgage approvals fell to their lowest since December 2023, with just 54,918 new home loans approved in August on a seasonally adjusted basis as borrowing costs deterred buyers⁹. Fuel costs and borrowing costs are squeezing the same households at the same time.