Wholesale UK diesel prices fluctuated in June from 46.5ppl (excluding duty) to almost 60ppl, before falling back to 50ppl by month-end. This can be largely attributed to significant volatility in Brent crude prices due to substantial geopolitical tensions.
At the beginning of June, Ukraine conducted a surprise drone attack on several Russian airbases. Additionally, nuclear talks between the United States and Iran stalled, and Israel launched airstrikes against Iran’s nuclear sites. Iran retaliated with drone strikes, and Iranian parliamentarians started preparing a bill to withdraw from the nuclear Non-Proliferation Treaty, causing oil prices to rise.
Towards the end of the month, the US conducted strikes on three Iranian nuclear facilities. But investors saw no immediate impact on physical oil flows, and the intensity of Iran’s response appeared to subside. On the 24 June, President Trump announced that a ceasefire had been agreed, and oil prices marked their sharpest two-day decline since 2022, at 13%.
GBP appreciated from US$1.355 to US$1.370 in June, reaching its highest level since October 2021. The US dollar continued to weaken after President Trump doubled tariffs on steel and aluminium imports from 25% to 50%.
Furthermore, he insisted that the US Federal Reserve must lower interest rates, but the central bank held them between 4.25% and 4.5%. Consequently, there has been speculation that Trump will announce a successor to Chair Jerome Powell by September.
Meanwhile, Bank of England (BoE) Governor Andrew Bailey suggested that Trump has “blown up” the multilateral trade system that underpins the global economy, stating that the path of interest rates remains uncertain. BoE opted to maintain rates at 4.25%, amid persistent inflation.
Recent economic data showed that the UK’s private sector is still expanding, albeit marginally, and the International Monetary Fund upgraded the UK’s 2025 growth outlook. Finally, the government released a new Industrial Strategy, including a decade-long plan to increase investment and support UK industries, causing the pound to strengthen further.
GBP closed over 1% higher than the beginning of the month, leading to a c.0.47ppl reduction in UK wholesale diesel.
Wholesale UK renewable diesel (HVO) prices increased from 109.5ppl towards 130ppl before closing the month at 121ppl (excluding duty and RTFC benefit), due to tightening supply and increased demand.
The US Energy Information Administration lowered its forecast for HVO production in 2025 from 220,000 barrels per day (bpd) to 210,000bpd. Additionally, US renewable diesel production declined, despite stronger exports to Canada earlier in June.
On the demand side, UK imports of used cooking oil (UCO) reached their highest level since December 2024, following increased inflows from the Netherlands. In China, UCO prices reached multi-year highs on sustained demand from domestic sustainable aviation fuel (SAF) producers.
However, EU imports of UCO hit a five-month low as intake from China slowed, despite expectations that the US-China tariff announcements would increase flows to Europe.
In other news, the International Sustainability and Carbon Certification system has published 18 proposals for improving biofuel certification under the EU’s Renewable Energy Directive, after facing criticisms and widespread industry concern over the alleged fraud in the biofuel and feedstock supply chain.
Those previous complaints include the mislabelling of biofuels, including fake biofuels and biofuels made from virgin vegetable oil feedstocks but labelled as waste-based fuels. The EU has since launched the Union Database for Biofuels to track the supply chain from feedstock generation to end-use.
Finally, the cost of blending biodiesel to the UK B7 specification remained unchanged at just below 7.5ppl throughout the month, and thus the cost of Renewable Transport Fuel Obligation stayed the same.
Meanwhile, the price of Renewable Transport Fuel Certificates (RTFCs) declined fractionally from 25.7 pence per certificate to around 25p, slightly reducing the benefit that HVO consumers received (assuming 100% of the RTFC benefit is passed on the end-user).
