The White House on Wednesday denied that the Administration is considering a ban on U.S. diesel exports, clarifying comments from President Donald Trump and Treasury Secretary Scott Bessent a day earlier that appeared to leave the door open to restrictions as the average diesel price in America topped $6.50 per gallon.
A White House official denied a report that the Administration was preparing a 90-day ban on diesel exports, while Energy Secretary Chris Wright said nobody was considering a flat ban on shipments.
Instead, the Administration is discussing ways to get more diesel into the U.S. market while maintaining maximum flows of gasoline and jet fuel, Wright said.
The clarification came after President Trump on Tuesday signaled support for keeping more U.S. diesel at home, saying, “I’ve said let’s not send out the diesel. We make a lot of diesel.”
Treasury Secretary Bessent also said Tuesday, “We’re examining whether it’s feasible in terms of the overall refining capacity and whether a full or partial ban would work.”
The oil industry and oil market analysts say a ban is not a fix to the high prices and would ultimately backfire on U.S. fuel prices and refining capacity.
As of Tuesday, the national average diesel price had hit $6.5276 a gallon, per AAA data, up by nearly $1 from a month ago and almost $3 a gallon higher than at this time last year.
The global diesel crunch resulting from the wars in Iran and Ukraine, which choke supply out of the Middle East and Russia, is being felt in price spikes everywhere, including in the United States, threatening to hit economies, including the world’s largest.
For the U.S. Administration, record-high diesel prices and gasoline prices at an all-time high for this time of year, when they normally drop due to declining demand, could be a major blow ahead of the midterm elections in early November.
Some Republican Senators led by Iowa’s Chuck Grassley are calling for a ban on diesel exports as record-high diesel prices are hitting American farmers and truckers.
“W diesel $6.57 in Iowa why doesn’t Pres Trump put an embargo on diesel exports like presidents in the 70s put embargoes on ag products bc food prices were inflated. High diesel prices ARE KILLING FARMERS INCOME,” Senator Grassley said this weekend after the national diesel price hit $6.50.
Trump’s comments on Tuesday appeared to lend support to those calls, before the White House clarified Wednesday that a diesel export ban was not under consideration.
The Administration has sent mixed signals on possible restrictions over the past week.
Early last week, Interior Secretary Doug Burgum said, “We would consider an export ban if we thought that actually might lower prices, but that's not the case.”
Then Bessent said Tuesday that the Administration was examining whether a full or partial restriction could work.
On Wednesday, however, Energy Secretary Wright rejected the idea of a flat ban, saying it could actually increase gasoline and jet fuel prices.
“What's being discussed is what's the most efficient way to get more diesel into the United States of America, and continue maximum flows of gasoline and jet fuel,” Wright said, without providing further details.
Wright said the Administration was also discussing voluntary measures.
In the week since Secretary Burgum’s initial comment, national average diesel and gasoline prices continued to soar, and Republican Senators called for export embargoes to protect American farmers.
“If our govt can embargo chips to China it can embargo diesel to help American farmers & truckers We need our family farmers who feed&fuel the world 2b on the strongest footing possible no matter what’s happening across the globe,” Senator Grassley posted on X.
The issue with fuel prices is that they cannot be fixed “no matter what’s happening across the globe,” analysts and the American Petroleum Institute (API) say.
“We understand the administration is looking at every option to deliver relief, but restricting U.S. energy exports would only compound the problem—exacerbating refining challenges and ultimately hurting consumers,” API CEO Mike Sommers said.
“The answer is more supply and more flexibility—not new restrictions that risk making a difficult situation worse.”
The U.S. currently makes more diesel than it consumes and American exports are essential to provide relief to regions such as Europe and Latin America, where the diesel crunch is bigger.
If restrictions were imposed, refiners would reduce their run rates, ultimately deepening the global refining crisis and hiking prices even further, according to API.
“Limiting access to global markets could force refiners to cut runs—reducing production of diesel, gasoline and jet fuel and tightening supplies further at home and abroad,” the main U.S. oil lobby noted.
According to Patrick De Haan, Head of Petroleum Analysis at GasBuddy, “Keeping distillates and diesel home does not change the world price that reference our prices. You can't fence off a globally traded commodity by executive order and expect the global price to stop applying to it.”
An export ban would ultimately damage U.S. refinery capacity in the longer term as political regulation of “bringing prices down” would discourage investment in additional capacity, De Haan noted.
Moreover, the U.S. could lose its position as “the world’s backstop for diesel supply”, driving importing regions to diversify away from U.S. supplies. This will ultimately hit the refining capacity in America, the expert said.
“The bottom line is this: the U.S. is not short of diesel. The world is. A potential export ban treats the global price problem as if it was a U.S. only problem, and the cure would be far worse than the disease.”
By Tsvetana Paraskova for Oilprice.com
