Mixed messages from the U.S. administration over possible diesel export restrictions have triggered fresh debate in energy markets, but industry groups and analysts argue that such a move would not bring fuel prices down and could instead make the situation worse.
According to OilPrice.com, the U.S. average diesel price has climbed to a record $6.52 per gallon. Against that backdrop, President Donald Trump publicly backed the idea of restricting exports, while Treasury Secretary Scott Bessent said the administration was reviewing whether a ban would be feasible. Later, however, the White House and Energy Secretary Chris Wright effectively ruled out a blanket ban.
The article says the main driver behind higher prices is a global shortage of diesel supply. Even though flows through the Strait of Hormuz have picked up somewhat, only about 1 million barrels per day out of total outbound volumes of up to 10 million bpd are refined products, with the rest being crude. At the same time, refining capacity in the Middle East has been constrained by Iranian strikes on refineries, while Russian capacity has been curtailed by Ukrainian drone strikes at Russian refineries.
The report also notes that Russia has banned diesel exports until the end of September and is likely to extend that measure through October. Executives at major U.S. refiners estimate that 7-8 million bpd of petroleum products have been missing from the market for months, tightening global fuel supply and especially diesel availability.
Brian Mandell, Executive Vice President of Marketing & Commercial at Phillips 66, said on the company’s Q2 earnings call in early August that around 7 million bpd of refining capacity was offline in Asia and the Middle East, with another 1.4 million bpd down in Russia. He said the scale of the damage and difficulties in obtaining spare parts mean those refineries are unlikely to return quickly.
In its September monthly report, the International Energy Agency (IEA) said global refinery throughput reached a summer peak of 81.4 million bpd in August, up by 960,000 bpd from the previous month. Even so, that level was still 4.2 million bpd below the same period a year earlier, with losses spread across the Middle East, Russia, and crude-importing economies in Asia.
Why a ban could backfire
As diesel prices surged, a group of Republican senators led by Iowa’s Chuck Grassley called for a ban on diesel exports, arguing that record prices are hitting American farmers and truckers. But Chris Wright said on Wednesday that “the blunt tool of banning diesel exports definitely doesn't work.”
His argument is that if U.S. refiners cannot export the diesel they produce, they would quickly run into storage limits and be forced to cut refinery runs. That would reduce output not only of diesel, but also of gasoline and jet fuel, since those products are produced together.
U.S. business and manufacturing groups have echoed that view. Nearly three dozen industry associations, including the American Petroleum Institute (API), the American Fuel & Petrochemical Manufacturers (AFPM), the National Association of Manufacturers, and the U.S. Chamber of Commerce, sent a letter urging Donald Trump to reject the idea of fuel export restrictions.
They warned that export bans would lead to lower fuel production, tighter supplies, and higher costs for American families, farmers, and truckers. The letter also said such a policy could lift gasoline and jet fuel prices and provoke retaliatory actions from other countries.
AFPM says U.S. refineries are currently producing about 5.3 million bpd of distillate fuel, while domestic demand averages around 3.6 million bpd. If exports were banned, the group argues, refiners would not be able to stockpile unlimited diesel and would have to scale back overall fuel production.
The article also highlights regional risks. U.S. areas that depend on fuel imports, including the Northeast, could face even higher prices for all fuels heading into winter. Beyond the economic impact, industry groups warn of a geopolitical cost as well: if the United States pulls back from export markets, other suppliers would step in and America’s energy influence would shrink.
