U.S. President Donald Trump said the White House is still “very seriously” considering a ban on diesel exports as surging fuel prices add to political pressure ahead of the November midterm elections. Speaking to Fox News, he said such a move could in some cases also lift gasoline prices for motorists, but the option remains under active review.
Trump has previously backed the idea as retail diesel prices hit fresh records. U.S. Energy Secretary Chris Wright has said the administration is weighing restrictions rather than necessarily a full ban, while Politico reported last week that officials were preparing a plan to halt diesel exports for 90 days.
The proposal has drawn strong opposition from the U.S. energy industry. Analysts warn that action by the world’s largest diesel exporter could worsen the global fuel crunch rather than ease it. Diesel prices have surged amid hostilities involving the U.S. and Iran, as well as Russia and Ukraine, disrupting key oil and fuel trade routes.
According to AAA, the average U.S. diesel price was around $6.50 a gallon on Friday. That is sharply higher than a year ago and only slightly below the record $6.53 reached on Sept. 22. Commodity strategists at Morgan Stanley said a U.S. export restriction could initially lower domestic diesel prices, but with potentially harmful knock-on effects further down the supply chain.
The bank said global diesel prices could rise and U.S. gasoline prices could also face upward pressure if refiners adjust operating rates. Benedict George, head of European product pricing at Argus Media, said any U.S. curbs would likely send European diesel prices and premiums against crude to a new unprecedented level, noting that the U.S. has supplied about half of Europe’s diesel imports in recent months.
