The average price of diesel in the UK crossed the £2 per litre mark on Monday. This increase follows a 54% rise in diesel costs since the beginning of the Iran war.
The Strait of Hormuz has been largely closed to traffic, impacting oil supplies, while refining capacity in the Persian Gulf has been significantly affected by the conflict. Shipments of refined products have reportedly fallen by up to half in recent months. Ukrainian drone strikes in Russia have also reduced that country's refining capacity, contributing to a global reduction in available diesel.
Concerns are growing over potential further supply issues, as Donald Trump is reportedly under pressure from Republican congressmen and senators to impose a 90-day ban on US diesel exports. The UK imports a third of its consumed diesel from the US and holds an estimated 42 days' supply in storage, which is described as the lowest buffer among major developed countries.
If severe shortages occur, the UK may face soaring prices, and the government could potentially introduce a subsidy scheme and rationing. This situation could highlight the UK's reduced industrial resilience, as the country has seen a decline in its own oil wells and refineries, now operating with only four refineries compared to being a net exporter of diesel in 1995.