There has been much speculation over the past week that the Trump administration will issue a ban on diesel exports, based on a statement by Trump himself. If this happens, consequences for Europe, especially Germany, will be devastating.

While countries such as Italy have kept sufficient refinery capacity, which currently runs at 77%, Germany has closed 12% of its refineries and cannot “squeeze” them to produce more diesel fuel. While German refineries are running on US oil, German reserves are at only 57% —way below target.

A ban on US diesel exports will force all European countries to scramble for oil to refine, thus pushing up the oil price internationally. Germany, which already has the highest diesel price, is confronted with a further increase in prices, which would be unsustainable for its economy.

In short, Germany, with low storage, high pump prices, and reduced refinery capacities, would face an economic collapse in the event of a U.S. ban on diesel exports.

Italy, although theoretically self-sufficient, will be hit by the diesel price spike anyway, because the diesel price is set at the Platts market, a division of S&P Global, for the entire EU. Italy exports 7-8 million tons and imports 5-6 million, for logistical and geographical reasons. In order to survive, it might ban imports and price its domestic fuel independently. Rome has already pushed its national oil company, ENI, to put a 30-day cap on fuel prices.