Key facts
- President Donald Trump supports a ban on U.S. diesel exports.
- US diesel prices hit a record $6.5276 per gallon on Tuesday.
- Energy Secretary Chris Wright opposes the ban, warning it could increase gasoline and jet fuel prices.
- US exported a record 1.6 million barrels per day of diesel in August.
- US on-road diesel inventories are nearly 13% below the seasonal average.
- US refiners are operating at about 97% of capacity.
President Donald Trump has declared his support for a potential ban on diesel fuel exports, stating, 'I've said let's not send out the diesel. We make a lot of diesel ... I've called for it.' This statement comes as the national U.S. average for diesel hit a record $6.5276 per gallon on Tuesday, according to AAA.
The US administration is examining the feasibility of a partial or total ban. The idea of an export ban has gained traction among some legislators, including Senator Dan Sullivan, who called for a temporary pause to rebuild reserves ahead of winter and prioritize American families. However, Energy Secretary Chris Wright and Interior Secretary Doug Burgum oppose the measure, deeming it a bad idea that would backfire.
Supply disruptions, including Ukrainian drone attacks on Russian refineries and tensions in the Middle East, have contributed to the surge in diesel prices. Europe has been highly dependent on diesel and jet fuel imports from the United States since the US-Israeli war on Iran has disrupted Middle East supplies. Ole Hansen, head of commodity strategy at Saxo Bank, noted that Brent crude is being underpinned by surging gasoil prices amid renewed worries the US may introduce a diesel export ban.
Analysts and market watchers, however, have warned that such a measure would do little to ease high energy prices and could worsen supply and economic disruptions around the globe. Oil prices have come under pressure this week on rising Gulf supplies and hopes for diplomatic talks to halt hostilities in the Middle East. Trump warned on Tuesday that he could 'annihilate' Iran, but he also said his envoys had held productive talks with mediators of Iran to end the war. Saudi Arabia resumed operations on its East-West Pipeline to the Red Sea on Tuesday after drone attacks forced a shutdown, and Iraq is increasing oil exports.
A White House official on Wednesday denied a news report that the US is preparing a 90-day ban of diesel exports in an attempt to control record prices for fuel widely used by farms, trains and trucks. Energy Secretary Chris Wright said nobody is considering a flat ban on shipments of the fuel.