Key facts
- Energy experts warn a US diesel export ban could offer only temporary price reductions.
- A ban risks driving oil producers to stop drilling due to a disappearing export market.
- Global diesel prices could rise due to supply shortages exacerbated by conflicts.
- US refiners and consumers could be harmed by export restrictions.
- The White House has stated the administration is not considering an export ban.
Energy experts are cautioning against a potential US ban on diesel exports, a measure reportedly considered by President Donald Trump to combat record-high domestic prices. While such a ban might offer temporary relief in certain US regions, analysts warn it could ultimately backfire by reducing drilling activity, increasing global diesel prices, and negatively impacting US refiners and consumers.
Record diesel prices, which have surged 83% this year to over $6.50 a gallon, are attributed to a combination of factors including the war in Iran, Ukrainian drone strikes on Russian refineries, and export restrictions by Russia and China. Republican lawmakers, including Senator Chuck Grassley and Representative Tim Burchett, have publicly supported export restrictions, with Louisiana Governor Jeff Landry proposing a 90-day ban.
However, industry representatives and economists argue that restricting US exports would exacerbate existing supply issues. Mike Sommers, president and CEO of the American Petroleum Institute, stated that export restrictions risk making a difficult situation worse and would compound refining challenges. Geoff Moody of the American Fuel & Petrochemical Manufacturers added that such bans have historically been avoided by administrations of both parties due to a lack of upside. Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities, suggested that resolving geopolitical conflicts, particularly in Iran, would be a more effective solution to lower diesel prices.
A White House official indicated that the administration is not currently considering an export ban, and Interior Secretary Doug Burgum expressed skepticism about its effectiveness, noting it could harm import-dependent areas.