White House Rejects Diesel Export Ban Amid Rising Prices

Amid record-high diesel prices averaging $6.52 per gallon nationwide, the Trump administration faced mounting pressure this week over whether to restrict U.S. diesel exports. While President Donald Trump and Treasury Secretary Scott Bessent hinted at the possibility, the White House ultimately denied that an export ban is in the works. Analysts and industry leaders argue that limiting exports would backfire, driving prices higher and weakening America’s energy influence abroad.

Global Supply Crunch Fuels Price Surge

Diesel prices have climbed as global refining capacity has tightened. Although flows through the Strait of Hormuz have increased, only about 1 million barrels per day out of an estimated 10 million barrels daily consist of refined products, with the remainder being crude oil. Refinery output in the Middle East remains constrained due to Iranian strikes, while Ukraine’s drone attacks have disrupted operations in Russia, which has banned diesel exports through at least September.

Brian Mandell, Executive Vice President of Marketing and Commercial at Phillips 66, noted during the company’s Q2 earnings call that roughly 7 million barrels per day of refining capacity in Asia and the Middle East remains offline, along with an additional 1.4 million barrels in Russia. “And the refineries, depending on the damage and the ability to get spare parts, are going to take a good long time to get back online,” the executive added. The International Energy Agency reported that global refinery throughput peaked at 81.4 million barrels per day in August—up 960,000 barrels from July—but still 4.2 million barrels below last year’s levels.

Industry Opposes Export Restrictions

Some Republican senators, including Iowa’s Chuck Grassley, have urged the administration to ban diesel exports as soaring costs burden farmers and truckers. However, Energy Secretary Chris Wright dismissed the idea, calling export bans “a blunt tool” that fails to address underlying supply issues. “If you can’t export the diesel that comes out of our refineries, you run out of places to store it, and you have to reduce US refining, which would put upward pressure on gasoline prices and jet fuel prices,” he added.

Dozens of trade groups echoed Wright’s stance in a joint letter, including the American Petroleum Institute, the American Fuel & Petrochemical Manufacturers, the National Association of Manufacturers, and the U.S. Chamber of Commerce. They warned that export restrictions would reduce domestic fuel output, tighten supplies, and invite retaliation from trading partners. “We, and indeed virtually every expert in the fuels market, fully agree with Secretaries Wright and Burgum that an export ban would force reductions in refining utilization, increase prices for gasoline and jet fuel, and lead to retaliatory actions from other countries.”

Export Ban Would Undermine Domestic Output

U.S. refineries currently produce around 5.3 million barrels of distillate fuel per day, while domestic consumption averages about 3.6 million barrels, according to AFPM. Banning exports would leave refiners unable to offload surplus diesel, forcing them to scale back production. Since diesel, gasoline, and other fuels are often processed together, cutting one impacts all. “Less fuel production means tighter supplies and higher prices for both diesel and gasoline,” AFPM explained in a recent briefing.

The loss of export markets could also erode America’s standing as a reliable energy supplier. “If we pull back, other countries will step in, our influence will shrink, and our adversaries will gain ground,” industry groups cautioned. AFPM summarized the concern bluntly: “Export bans do not create more fuel for Americans. They reduce U.S. fuel production, put upward pressure on prices, weaken energy security and hand market share to foreign competitors.”

Analysts Warn of Deeper Crisis

With global markets already strained by geopolitical tensions and infrastructure damage, removing American output from export channels would only deepen shortages. As the administration weighs options to ease record prices, the consensus among experts is clear: restricting exports may offer political optics but carries steep economic risks.