Key facts
- US Energy Secretary Chris Wright stated that banning diesel exports would increase gasoline and jet fuel prices.
- Wright warned that restricting exports would lead refiners to cut output, tightening supplies of other fuels.
- President Trump signaled support for a diesel export ban amid record US and European diesel prices.
- European diesel's premium to Brent crude jumped to a record over $95 a barrel.
- US diesel exports account for about 1.5 million barrels a day, or 20% of global seaborne trade.
- The American Petroleum Institute cautioned that restricting exports could lower US fuel production and damage the global economy.
US Energy Secretary Chris Wright on Wednesday publicly opposed calls for a ban on US diesel exports, arguing that such a measure would backfire by increasing gasoline and jet fuel prices. Wright stated at an event in New York that restricting exports would leave refiners with excess diesel inventories, forcing them to cut refinery output, which would ultimately drive up costs for consumers and businesses.
Wright's comments put him at odds with President Trump, who had signaled support for the idea on Tuesday as diesel prices surged to record highs in the US and Europe. Treasury Secretary Bessent has been assigned to assess the feasibility of such a ban.
Trump's remarks already sent European prices for the fuel surging. European diesel's premium to Brent crude jumped to more than $95 a barrel on Wednesday, a record in data going back to 2011, according to Bloomberg. The US has become Europe's main overseas supplier of diesel, with American exports surging to a weekly record near 2 million barrels a day last month.
The American Petroleum Institute cautioned against the move, stating that restricting exports is not a solution to high prices and could instead result in reduced refinery runs, global economic damage, and potentially higher US prices. Bloomberg macro strategist Michael Ball noted that while a ban might cause a brief drop in US diesel prices, it risks creating a larger supply problem down the road, especially with distillate stocks at seasonally record lows. A broad curb could strand as much as 1.5 million barrels a day, roughly 29% of US diesel output. The global impact could be worse, as there is no real replacement for US export volumes, leaving Latin America and Northwest Europe particularly exposed.