Diesel prices could rise further if U.S. proceeds with plans for export ban

The prices of fuel will likely rise further if the U.S. government decides to ban the export of diesel in the coming months. The average diesel price in the European Union hit a record high of 2.23 euros per liter on Thursday. An important part of Dutch diesel comes from the U.S., but due to international trade, U.S. diesel could also enter the country via Norway or Turkey.

Erik de Vries of the trade association for independent fuel traders NOVE pointed out that the demand for diesel in the Netherlands is dropping drastically because more and more people are driving electric cars. “But in the short term such an export ban would be a problem and will certainly have an impact. Diesel is not only used in trucks, but also in agriculture, for generators in construction, and in the industrial sector,” the director said.

Consumers' savings platform UnitedConsumers, which keeps track of fuel prices, is expecting fuel prices to rise if the U.S. bans exports. Martin van Eijk, chairman of the trade association for Dutch petrol station owners Drive, agrees with this. “It will create more of a scarcity. That will not improve our situation, but what it will mean exactly I couldn’t say.”

U.S. bank Morgan Stanley has said that Europe would be hit hardest in a U.S. export stop, with a significant rise in prices as a result.

The Netherlands and France hit record-high diesel prices last weekend of 2,41 and 2,82 euros per liter, respectively. A total of 19 EU countries, including Germany, Italy, Denmark, and Finland, have registered record prices, weekly data going back to 2005 shows.

Spain and Sweden also saw prices rise, but diesel prices are still lower than the peak of 2022 after Russia’s invasion of Ukraine. Fuel prices have risen sharply in recent times due to the escalating violence in the Middle East, which included the shutdown of a major oil pipeline in Saudi Arabia following a drone attack.

Damage to facilities in the Gulf region has also severely reduced the supply of diesel, an essential fuel for industry, transport and agriculture.