President Donald Trump said Sunday that his administration is “thinking about” restricting diesel exports, reviving an idea that drew industry blowback just days after reports that the White House had moved away from a broader ban. The renewed discussion comes as diesel prices in the United States remain near record levels and global supply remains tight.
Trump made the comment while attending the Presidents Cup golf tournament in Illinois, according to CNBC. The proposal matters beyond truck stops and farm country because analysts and refiners say export limits could affect gasoline production too, not just diesel.
Trump puts diesel limits back on the table
Trump told a Fox News reporter on Sunday, “We’re thinking about it very seriously,” according to CNBC. He added, “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.” CNBC reported those remarks on September 28, after saying Trump is facing political pressure over fuel prices ahead of the November midterm elections.
The latest comments followed a confusing week inside Washington. CNBC reported that Energy Secretary Chris Wright has said the White House is considering restrictions rather than an outright ban, while Politico reported last week that the administration had been preparing a 90 day diesel export ban. The White House had not announced a diesel export order as of CNBC’s report.
The pressure point is price. CNBC cited AAA data showing average U.S. diesel prices were around $6.50 a gallon on Friday, up sharply from a year earlier and just below a record $6.53 set on September 22. AAA’s fuel tracker separately showed the national diesel average at $6.3368 as of September 26, while regular gasoline averaged $4.4874 that day.
The argument against export limits is straightforward. The American Petroleum Institute said September 22 that “restricting U.S. energy exports would only compound the problem,” adding that the move would worsen refining challenges and “ultimately hurt consumers.” API President and CEO Mike Sommers said the answer is “more supply and more flexibility,” not new restrictions.
CNBC also cited Morgan Stanley strategists, who said a U.S. export restriction would likely lower domestic diesel prices at first, “but with potentially adverse reactions downstream.” In their view, global diesel prices would rise and refinery adjustments could feed back into higher U.S. gasoline prices. That matches API’s warning that Gulf Coast refineries rely on exports as an outlet for surplus diesel and could cut runs if that outlet shrinks.
Overseas markets are watching closely. Benedict George, head of European product pricing at Argus Media, told CNBC that some form of U.S. restriction would likely push European diesel prices and premiums against crude “to a new unprecedented level.” He also said the U.S. has supplied about half of Europe’s diesel imports over the last couple of months.
For now, there is no confirmed federal export ban in effect. George told CNBC that “there is no measure yet” and said it remains unclear whether any action will happen at all or what form it would take. He said traders mostly doubt the United States will restrict diesel exports because of how difficult such a move would be for oil companies.
The wider market strain is already visible. CNBC reported that diesel prices have surged amid hostilities involving the U.S. and Iran and the ongoing Russia-Ukraine war, with fuel trade routes disrupted and Russian refinery attacks adding pressure. George told CNBC diesel has become “the biggest problem for the global oil system.”
What comes next appears to hinge on White House decisions in the coming days or weeks, not on any announced timetable. CNBC reported that discussion has centered on a short term measure, with George saying any U.S. export restriction, if imposed, has been discussed as lasting “two or three months at an absolute most.” Until then, the administration has not said whether it will impose narrower limits, a temporary ban or no new restrictions at all.