WASHINGTON, D.C. — Diesel prices are surging, and now the Trump Administration is weighing a move that could reshape energy markets at home and overseas.
President Trump says a temporary diesel export ban is on the table, but business groups are warning the move would come with serious consequences.
The price of diesel fuel has jumped 85 cents in the last month, according to AAA. Now, the White House is weighing whether or not a diesel export ban would do more harm than good.
At $6.45 a gallon, diesel prices are hitting American drivers, truckers and businesses hard. Global supply disruptions tied to the wars in Iran and Ukraine have squeezed fuel markets and pushed prices sharply higher.
The White House is floating a temporary ban on diesel exports to alleviate the pinch in the U.S.
“We’re thinking about it very seriously,” said President Trump over the weekend. “That can oftentimes lead to a little bit of an increase on gasoline for cars. So we’re looking at it very seriously. We may do it.”
President Trump said Russia’s damaged refineries are a major factor behind the diesel crunch, pointing to continued attacks on Russian energy infrastructure.
“This isn’t really a Middle Eastern problem. This is more of a Russia problem,” said Trump. “Ukraine and Russia are going at it and Ukraine is blowing up diesel refineries in Russia because they do a lot of the refining.”
Analysts say a diesel export ban in the U.S. would be unprecedented.
“We’ve never seen a diesel export ban. I don’t think we’ve ever seen a refined product ban at all,” said Patrick De Haan, head of petroleum analysis for GasBuddy.
De Haan said a diesel export ban would likely add another layer to an already strained global fuel market.
“Global diesel supply is already tight because Russia has slashed exports, they banned exports. It would drive up global diesel prices tremendously, especially through Europe, South America, Central America,” De Haan said, adding that it could also deter more domestic oil production. “Banning diesel may be a short lived and small improvement of price, but this is giving refineries incentive to run less hard, when what you’d want to do as a policymaker, is give them every incentive to do just the opposite, producing as much as possible,” De Haan added.
In a recent letter to President Trump, dozens of business groups urged against a ban, arguing it would lead to tighter supplies and higher costs for Americans.
“American farmers, truckers, and families are feeling real pain at the pump, and we share President Trump’s urgency to find a solution. President Trump’s efforts to expand domestic production have kept prices from rising even higher, and it remains the case that the best path to reducing prices broadly is to restore the transport of oil and fuels in the Middle East. A ban on U.S. oil or fuel exports, on the other hand, even if temporary, would create more problems than it would solve. As the world’s largest diesel exporter, a ban risks triggering a cascading effect across energy markets, driving up costs for consumers, squeezing U.S. refiners, and jeopardizing supplies of gasoline and jet fuel that Americans depend on every day,” said Neil Bradley, chief policy officer at the U.S. Chamber of Commerce, in a statement.
