UK in Talks with Washington as Trump Threatens Diesel Export Ban

Britain has opened discussions with the United States in an effort to head off a possible American ban on diesel exports, Chancellor John Healey has confirmed, while also instructing officials to prepare contingency plans in case the restrictions go ahead.

The talks come at a delicate moment for UK fuel supplies. Diesel prices in Britain climbed to a fresh record on Monday, with the average cost of a litre reaching 199.18p, according to figures from the RAC motoring organisation. That edges past the previous peak of 199.09p set in June 2022, in the aftermath of Russia's full-scale invasion of Ukraine.

Petrol has also been moving higher, with a litre now priced at an average of 174.13p. The twin increases reflect broader turbulence in global fuel markets rather than any single domestic disruption, with wholesale oil production and transport across the Middle East heavily affected by the conflict involving Iran and the continuing war in Ukraine.

The immediate trigger for the government's concern is a threat from US President Donald Trump, who said over the weekend that Washington was considering a ban on diesel exports. "We're thinking about it very seriously," Trump said, without setting out a timetable or confirming that a decision had been taken. The BBC has approached the White House for comment.

Speaking on the sidelines of Labour's annual party conference in Liverpool, Healey acknowledged that UK diesel prices had reached "extreme" levels. He said ministers were in contact with their American counterparts and were simultaneously building domestic resilience.

"We're also making the provision that we may need to and we have our own stocks in the UK," the Chancellor said, adding that Britain works "very closely with the Americans." He framed the preferred outcome as a diplomatic one, saying the two countries were cooperating on measures that would "solve this, or at least significantly ease it" — namely a settlement that brings an end to the fighting with Iran.

The exposure is significant. Around one third of the diesel imported into the UK comes from the United States, so an export ban would tighten an already strained market and is likely to push pump prices even higher. Analysts note that alternative suppliers, including refineries in Europe and the Middle East, are operating close to capacity and would struggle to fill the gap quickly.

Behind the American calculation is domestic politics. US sources indicate that Trump is weighing an export ban as a way to bring down prices for American consumers ahead of the critical midterm elections, when fuel costs are traditionally a potent issue at the ballot box. Restricting shipments abroad could keep more supply at home, though economists caution that such moves often distort global markets and can invite retaliation from trading partners.

For UK motorists, hauliers and businesses, the concern is less about diplomacy than about the weekly cost of keeping vehicles and supply chains moving. The RAC said diesel prices had entered "uncharted territory," describing the milestone as a reminder of "just how exposed the UK is to events occurring far away." Diesel is not merely a consumer fuel: it powers the vans, lorries and delivery fleets on which much of the economy depends, so sustained increases feed through into the price of goods on shelves.

The timing is uncomfortable for the government. Healey is preparing what he called a "breathing space" Budget for 28 October, and he said he was "very aware" of the cost of living pressures facing households as he finalises those plans. Among the measures under scrutiny is fuel duty. A freeze first introduced by the Conservative government in 2022 is due to expire at the end of the year, with duty scheduled to rise by 3p in January and by a further 2p in March.

Scrapping or extending that freeze would carry a substantial cost to the public finances, but allowing the increases to proceed while pump prices are at record highs would be politically difficult. The Chancellor gave no indication of which way he is leaning, instead returning repeatedly to the international dimension.

"Fundamentally, what we need is a settlement in the Middle East," Healey said. "We need an easing of the pressure of costs on business, the costs on households and on ordinary families that we see at the pumps in the most extreme level today for diesel."

The government's dual-track approach — lobbying Washington while stockpiling at home — reflects limited room for manoeuvre. Should a ban take effect, ministers would be left managing the consequences rather than preventing them, relying on domestic reserves, seeking alternative cargoes and possibly revisiting tax measures to cushion the blow.

Much now depends on decisions in Washington and on the trajectory of the Iran conflict. If a diplomatic settlement materialises, pressure on wholesale oil markets could ease and prices may retreat from their record levels. If it does not, and if Trump proceeds with export restrictions, UK diesel costs could rise further, sharpening the squeeze on households and businesses just as the Chancellor delivers his Budget.