UK in Talks with Washington as Trump Threatens Diesel Export Ban, Chancellor Reveals

Britain has opened negotiations with the United States over a possible halt to American diesel shipments, while simultaneously drawing up contingency plans in case the taps are turned off, Chancellor John Healey has disclosed.

In comments to BBC News, Healey confirmed that the government is engaged in active discussions with US authorities about the potential stoppage, which has been floated by President Donald Trump. The chancellor also said Whitehall has begun preparing for the possibility that the ban could become reality.

The chancellor spoke on the margins of the Labour Party's annual conference in Liverpool, where cost-of-living concerns have dominated the political conversation. He described the current price of diesel in the UK as "extreme", acknowledging the severity of the situation facing motorists and businesses.

Trump signalled over the weekend that his administration was weighing up a ban on diesel exports, telling reporters: "We're thinking about it very seriously." The proposal has alarmed UK officials because Britain sources roughly one-third of its diesel imports from the United States, meaning any interruption would tighten an already strained market.

Should Washington proceed with the measure, fuel prices in Britain would almost certainly climb further, compounding the financial pressure on households, hauliers, farmers and manufacturers who rely on diesel to keep goods and supply chains moving.

US sources have indicated that Trump's motivation is domestic politics. With critical midterm elections approaching, the president is reportedly considering restricting exports in an effort to push down prices for American consumers. Diverting fuel away from foreign buyers and into the home market could offer short-term political relief, even if it creates friction with allies.

Healey said Britain maintains close working relationships with the Americans and is pursuing a twin-track approach: seeking a negotiated solution while preparing domestic defences. "In the end, we're also working with the Americans where we can try and put in place what will solve this, or at least significantly ease it," he said, describing a diplomatic settlement and an end to the fighting with Iran as the ultimate answer.

The chancellor emphasised that the UK holds its own fuel stocks, a buffer that could provide some cushioning if imports are disrupted. The government, he added, is "making the provision that we may need" to rely on those reserves.

The immediate trigger for the crisis is the volatile global energy picture. The conflict between the US, Israel and Iran, now in its seventh month, has severely disrupted both the production and transportation of wholesale oil across the Middle East. Russia's ongoing war in Ukraine has added further strain, and the combination has sent the price of refined fuels surging worldwide.

The domestic impact has been stark. According to the RAC motoring organisation, the average price of a litre of diesel in the UK hit 199.18p on Monday, eclipsing the previous record of 199.09p set in June 2022, shortly after Russia launched its full-scale invasion of Ukraine. Petrol has also been climbing, with a litre now costing 174.13p.

The RAC said diesel prices had entered "uncharted territory" and described the milestone as a reminder of "just how exposed the UK is to events occurring far away" — a pointed observation about the country's dependence on imported refined fuel.

Healey said he was "very aware" of the cost-of-living pressures bearing down on families as he prepares what he called a "breathing space" Budget, due to be delivered on 28 October. That fiscal statement is now likely to be framed around relief for households squeezed by energy and transport costs.

One looming decision concerns fuel duty. A freeze first introduced by the Conservative government in 2022 is scheduled to lapse at the end of the year. Under current plans, duty would rise by 3p in January and by a further 2p in March, adding to the burden at the pumps unless the chancellor intervenes.

Healey's remarks suggest the Treasury is alive to the political danger of allowing duty to rise while pump prices are already at record levels. Any decision to extend the freeze would carry a cost to the public finances, but letting it expire could intensify the squeeze on motorists and businesses at a delicate moment.

For now, the government's priority is diplomatic. Healey made clear that a settlement in the Middle East remains the fundamental fix, alongside efforts to ease cost pressures on businesses, households and "ordinary families" who are paying what he called the most extreme diesel prices on record.

The BBC has approached the White House for comment on the state of discussions and on whether a formal export ban is imminent. Until Washington clarifies its intentions, UK officials are left planning for a range of scenarios — from a negotiated reprieve to a full-blown supply shock that would test the country's fuel reserves and the chancellor's Budget strategy alike.