Trump Backs Diesel Export Ban as US Prices Hit Record Highs

Key points

• US diesel prices hit a record $6.53 per gallon on Tuesday, over 75% higher than a year ago.
• Trump stated he has advocated for a diesel export ban within his administration, saying 'let's not send out the diesel.'
• Treasury Secretary Scott Bessent said the administration is examining whether a full or partial ban is feasible given refining capacity.
• Republican lawmakers, including Sen. Chuck Grassley and Rep. Ashley Hinson, called for the ban to alleviate costs for farmers and consumers before the November midterms.
• Industry groups like the American Fuel and Petrochemical Manufacturers and the American Petroleum Institute warned that an export ban would reduce production and ultimately hurt consumers.
• Energy experts noted that while a ban might temporarily lower prices in some regions, it could cause global prices to skyrocket and force refiners to cut output, raising prices again.

Background

This development follows a week of intense debate over US diesel export policy. On September 21, the White House initially stated it was not considering a ban, but by September 22, Trump had signaled support for restrictions as prices surged. The current situation is driven by global supply cuts from wars in Ukraine and Iran, which have reduced exports from major producers like Russia and Saudi Arabia. Domestic prices have risen sharply, with California reaching $8.44 per gallon, putting pressure on the administration to act before the midterm elections.

How outlets are covering it

The Guardian and CNBC report that Trump and Bessent are actively considering a ban, with Trump expressing strong support. The American Fuel and Petrochemical Manufacturers and the American Petroleum Institute oppose the ban, arguing it would reduce production and worsen shortages. Marketplace.org highlights expert concerns that a ban could backfire by causing refiners to cut output and raising global prices. Some Republican lawmakers, including Grassley and Hinson, support the ban to help rural voters, while others in the party resist it, highlighting an intra-party split. The Financial Times reported that Trump urged Zelenskyy to pause strikes on Russian refineries to prevent further price spikes.

Why it matters

Diesel is critical for transporting goods and harvesting crops, so high prices directly impact grocery bills and consumer goods. A potential export ban could temporarily lower US prices but may disrupt global supply chains and reduce refining output, leading to higher prices in the long term. The decision could also affect US relations with allies and impact the midterm elections by influencing voter sentiment on economic issues.

What to watch

The administration is expected to make a decision 'one way or another' on the diesel export ban soon, according to Trump. Bessent is evaluating the feasibility of a full or partial ban based on refining capacity. The outcome will depend on whether the administration prioritizes short-term price relief or long-term supply stability. Industry groups and experts will continue to monitor the impact on refining output and global prices.