President Donald Trump is backing the idea of a ban on diesel exports as a way to curb soaring energy costs. This comes as diesel prices in both Europe and the US have reached record highs, fueled by wars in Iran and Ukraine that have sharply cut exports from major producers like Russia, Saudi Arabia, and the United Arab Emirates. Treasury Secretary Scott Bessent confirmed that the administration is examining the feasibility and potential impact of a full or partial ban.
Several Republican lawmakers, including Senator Chuck Grassley and Representative Tim Burchett, have publicly called for a diesel export embargo. Louisiana Governor Jeff Landry has also advocated for a 90-day ban. The AAA reported that US diesel prices hit $6.53 per gallon on Tuesday, marking a more than 70% increase since February when the US and Israel first struck Iran. The rise in prices is significantly impacting farmers and truckers, who rely heavily on diesel for their operations.
However, energy experts caution that an export ban could be a short-term solution and might ultimately worsen the global supply crunch, potentially driving diesel prices even higher. The US exports diesel because domestic refineries produce approximately 5.3 million barrels of distillates daily, while domestic demand is around 3.6 million barrels per day. Analysts like Patrick De Haan from GasBuddy argue that a ban misdiagnoses the problem, as diesel is traded on global markets and prices are influenced by international production and shipping disruptions, such as Russia's recent ban on diesel exports after attacks on its production facilities. Russia typically accounts for about one in nine barrels of diesel produced globally.
Experts suggest that barring US refiners from selling diesel overseas could lead to unintended consequences, including a reduction in domestic diesel production as refiners might cut output or shift to producing other types of fuel that can be legally exported. Tracy Shuchart, CEO of Hilltower Resource Advisors, also warned that refineries might try to circumvent a ban. Instead of an export ban, alternative measures proposed include extending a waiver of the Jones Act, which requires US-built, US-flagged, and US-crewed vessels for goods shipped among US ports, or temporarily waiving a federal rule requiring refiners to sell a certain amount of renewable fuel, which could lower prices by $0.10 to $0.20 per gallon.
While a White House official previously stated that an export ban was not "on the table at this time," President Trump's recent comments indicate growing consideration. Such a move would represent a significant intervention in energy markets and could send shockwaves through European countries that heavily rely on American petroleum products, potentially exacerbating existing protests over high energy prices.
