Experts Warn U.S. Diesel Export Ban Could Backfire
President Trump has said he is considering restricting overseas sales of
the fuel to bring down domestic prices, but experts say the policy will have many
unintended effects.
Policy Proposal
·
President Trump considering restricting or banning diesel exports to
lower domestic prices before midterms.
·
Goal: reduce costs for farmers, truckers,
and businesses.
·
Diesel currently averages $6.51/gallon, up
from $3.69 a year ago.
Why It May Fail
·
Export ban could cause refineries to cut production,
raising prices again.
·
Diesel is produced alongside gasoline and
jet fuel; restricting exports could reduce supply of all fuels.
·
Temporary price drops possible in regions
like the Midwest and Northeast, but not sustainable.
Legal & Political Context
·
Trump may use emergency powers or
the Defense Production Act;
Congress could enact a ban but is not in session before elections.
·
Energy Secretary Chris Wright:
administration not considering a “full blanket ban.”
Global Impact
·
U.S. supplies 20% of global seaborne diesel trade.
·
Europe, Asia, and Latin America heavily
reliant on U.S. diesel.
·
EU warns disruption would worsen
inflation; Britain’s diesel prices already up 39% since
war in Iran began.
·
Brazil imports nearly 20% of its diesel from the U.S.,
leaving its economy vulnerable.
Root Cause
·
Analysts stress the war with Iran and
disruptions in Russia are the main drivers of high diesel prices.
·
Ending hostilities and reopening the Strait of Hormuz would
lower global fuel costs more effectively than an export ban.
[ABS News Service/25.09.2026]
Weeks away from the midterm elections, President Trump is considering
banning or restricting exports of diesel fuel to the rest of the world. It’s an effort to bring down surging
prices that have become a major concern for many voters.
An export ban, as some Republican lawmakers and candidates see it,
would lower costs by keeping more diesel at home. That would reduce fuel costs for
farmers, truckers and other businesses.
But many energy experts say a ban would not lower prices for long
and could ultimately backfire. That’s because a ban could prompt U.S. oil refineries
to make less diesel, which would cause the fuel’s price to rise again. Restrictions
on diesel exports could even reduce the supply of gasoline, jet fuel and other fuels
that are made alongside diesel in refineries.
Diesel cost an average of $6.51 a gallon on Thursday, up from $3.69
a year ago, according to the AAA motor club. Prices began rising after Israel and
the United States started attacking Iran nearly seven months ago, severely disrupting
the global energy system. Ukrainian attacks on Russian refineries have also driven
up the price of diesel and other fuels.
Experts agree that Mr. Trump could restrict exports under some of
the broad emergency powers he holds. But it is not clear whether he could enact
a complete export ban on his own, said Jason Bordoff, the founding director of the
Center on Global Energy Policy at Columbia University.
Congress gave the president authority to impose restrictions on crude
oil exports for up to one year in cases of national security and other emergencies,
including if the country is suffering from sustained shortages or if U.S. prices
are above those in the rest of the world.
The president has that authority because of legislation
passed by Congress in 2015, but that law does
not clearly include refined fuels like diesel, said Mr. Bordoff, who advised President
Barack Obama on energy issues. The Biden administration considered oil export restrictions
after Russia’s invasion of Ukraine in 2022 raised fuel prices.
To act on the strategy he has publicly proposed, Mr. Trump could
use some other authority, perhaps under the Defense Production
Act, to restrict diesel exports, Mr. Bordoff said.
“We’ve seen this administration find extraordinary authority,” he
said. “It doesn’t have to be a complete ban.”
Congress, however, could ban diesel exports. But that would require
the House to return to Washington; it is not scheduled to return before the November
elections.
Mr. Trump’s energy secretary, Chris Wright, said at a New York Times
climate conference on Wednesday that the administration was not considering “a full blanket ban or zero exports of diesel.” A day earlier, Mr.
Trump told reporters that the administration was discussing options to restrict
diesel exports.
The United States produces more than enough diesel to meet domestic
demand and to sell fuel to the rest of the world.
The United States produces about
5.3 million barrels a day of distillate fuels, which include diesel and heating oil, according to the Energy Information
Administration. Diesel fuel powers engines in heavy construction equipment, trucks,
buses, tractors, boats, trains and backup electricity generators.
Domestic consumption of diesel fuel typically accounts for 70 percent
of what the United States produces. The oil industry exports the rest. Of the eight
million barrels of diesel traded by sea each day, about 20 percent comes from the
United States — the single largest global source, according to the American Petroleum
Institute, which represents oil and gas companies.
A ban on diesel exports would lead U.S. refineries, fuel distributors
and other businesses to store the excess fuel until their tanks are full. Analysts
say that could lead to a potentially temporary drop in diesel prices in certain
parts of the country, like the Midwest, where farmers are angry about fuel costs,
and the Northeast.
After the start of the war with Iran, Mr. Trump relaxed a maritime law to make it easier to transport diesel and other fuels
by ship from the Gulf Coast to the Northeast, where, according to Reid l’Anson, an economist at the research firm Kpler, diesel inventories are low.
But when inventories around the United States filled up, oil producers
would cut production, which would reduce overall supply and increase petroleum prices.
Refineries configure their operations to produce various petroleum
products from the crude oil they process. Although refineries could produce more
of certain products — such as jet fuel rather than diesel — making such changes
is expensive and time consuming. It would be far simpler for refineries to cut production
of all fuels, causing the prices of gasoline, jet fuel and other products to increase.
“Higher diesel prices are a concern, but the main driver of the higher
prices is the war in Iran,” said Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities and a former senior adviser
at the Department of Agriculture. “End the war in Iran, open up the Strait of Hormuz,
and diesel prices will fall.”
Because less diesel has been coming out of Russia and the Middle
East, countries in Europe, Asia and Latin America have had to rely more on U.S.
diesel. The prospect of an export ban or restrictions is unnerving those importers.
“The European Union views with concern the reported U.S. plans to
ban diesel exports, including to the European Union,” Olof Gill, a deputy chief
spokesman for the European Commission, said on Thursday. “Any disruption would risk
negatively impacting both sides.”
Europe is particularly dependent on diesel because many of its cars
are powered by that fuel. In Britain, diesel prices have risen 39 percent since
the war in Iran began on Feb. 28, and they are close to the high they reached in
2022 after Russia invaded Ukraine.
“Right now, we don’t need that shock,” Richard Portes, professor
of economics at the London Business School, said of U.S. export restrictions. “We’ve
got enough inflationary pressures in the economy as it is.”
Many other countries are also dependent on U.S. diesel, including
Brazil, a major oil producer. That country gets nearly 20 percent of what it consumes
from the United States, according to analysts at the Atlantic Council, a research
organization. Rising fuel prices could take a substantial toll on the Brazilian
economy.
“The impact is potentially big,” said Monica de Bolle, a senior fellow
at the Peterson Institute for International Economics, adding that Brazil does not
have large oil and diesel reserves that it can tap in emergencies