Key facts
- US diesel prices have hit record highs due to global supply disruptions.
- US diesel inventories are at their lowest in over four decades.
- US diesel exports are equivalent to about 40% of domestic consumption.
- Republican lawmakers are pushing for an export ban to lower consumer costs ahead of midterm elections.
- Energy analysts warn an export ban could raise fuel prices both in the US and internationally.
The US administration is considering restricting diesel exports as prices reach record highs, driven by global supply disruptions and geopolitical tensions. The average price for a gallon of diesel stood at $6.50 on Friday, a significant increase from $5.61 a month prior, according to AAA.
Energy Secretary Chris Wright has been in contact with major oil refiners to assess their interest in voluntarily limiting diesel exports. This consideration comes amid pressure from Republican lawmakers, who are advocating for a temporary ban or embargo on exports to alleviate consumer costs ahead of the midterm elections. Senator Chuck Grassley urged President Trump to enact an embargo via executive action, while Senator Dan Sullivan called for a pause to rebuild reserves before winter.
Diesel prices have surged globally due to factors including the war between Russia and Ukraine and tensions with Iran, which have disrupted key trade routes. Drone attacks in Russia have damaged refineries, reducing global fuel availability. US refineries are operating at high capacity, but global supply gaps persist, according to Rachel Ziemba, a senior adjunct fellow at the Center for a New American Security. US diesel inventories have fallen to their lowest level in over four decades, with 107.9 million barrels recorded as of September 11, according to the US Energy Information Administration. This tightening global supply incentivizes American producers to sell into the higher-priced international market rather than solely serving domestic consumers.
Industry analysts and groups have cautioned that an export ban could lead to unintended consequences, potentially increasing fuel prices both within the US and internationally. US diesel exports represent approximately 40% of domestic consumption, highlighting the interconnectedness of the domestic and global markets.