UK considers import tariffs on US oil products

Market: Oil products
04/04/25

The UK government has included refined oil products from the US in a list of goods that could be subject to retaliatory tariffs.

The government said it was considering "potential tariff measures on US goods, should this be deemed necessary" in response to a 10pc US import tariff on UK goods and services — excluding energy — due to take effect on 5 April. The consultation will last until 1 May.

Light oils, gasoils, jet fuel, fuel oils, lubricants and bitumen all feature in the list of products possibly subject to retaliatory tariffs.

The UK could be particularly exposed to any tariff impact on US middle distillate imports in the event of retaliation. The UK sourced over a quarter of its 14.37mn t of 10ppm diesel and gasoil from the US last year, according to Vortexa, while 3pc of its 10.15mn t of jet and kerosine imports were sourced from the US.

It is not clear what tariff rate the UK is targeting in its potential retaliation.

For other oil products, any potential import tariff impact would become more muted as US refined product imports become less significant. The UK received just 6pc of its 1.92mn t total fuel oil imports from the US last year, while the UK was the fourth largest gasoline supplier to the US and received none of the product from its trade partner.

European refined product values have collapsed as a result of the escalating trade war which saw China retaliate today against the US' latest tariff action. Eurobob non-oxy gasoline barge prices dropped by 4pc to $700.75/t on 3 April at a time when trading activity typically picks up ahead of the US summer driving season. Indicated non-oxy barge values were set to drop further in the trading session today.

The EU is similarly preparing countermeasures against US import tariffs, which Washington set at 20pc from 9 April in addition to existing rates.

Ice gasoil futures had dropped by 10pc since President Trump announced the new tariff regime on 2 April to $615.75/t by the close today. Ice gasoil futures are used as the pricing basis against which diesel, gasoil and jet fuel grades are assessed in the European middle distillates markets.

European refined products market participants have pointed to a darker global economic outlook triggered by the US import tariffs as the driving force behind the drop-off in European product values.

By George Maher-Bonnett

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