White House denies report of 90-day ban on US diesel exports | Today’s news
The White House on Wednesday (Sept 23) denied reports that the Trump administration was preparing a 90-day ban on US diesel exports as record fuel prices put pressure on the administration amid the wars in Iran and Ukraine.
A White House official said the report that the US is considering a temporary, blanket ban on diesel exports is incorrect.
The rejection came after Politico reported that the administration was preparing a 90-day export ban, citing five people familiar with the discussions.
Chris Wright rejects diesel export ban
U.S. Energy Secretary Chris Wright has said separately that a blanket ban on diesel exports won’t work and may instead raise gasoline and jet fuel prices.
“The blunt tool of banning diesel exports is definitely not working,” Wright said at an event in New York on Wednesday.
“There is a debate about what is the most efficient way to get more diesel into the United States and maintain maximum gasoline and jet fuel flows,” Wright said.
Wright said the export restrictions could leave U.S. refiners short on storage capacity, forcing them to cut production.
“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 cut back on U.S. refining,” he said, adding that this would put upward pressure on gasoline and jet fuel prices.
Trump supported export restrictions
The White House’s denial came a day after President Donald Trump said he supported curbs on diesel exports as prices surged.
Trump said on Tuesday that he had told his advisers, “let’s not send diesel,” while Treasury Secretary Scott Bessent said the administration was looking into whether full or partial curbs on exports would be possible.
The matter created a rift in the administration.
Diesel prices in the US hit a record
U.S. diesel prices averaged about $6.52 a gallon on Wednesday, up about 76% from a year earlier, according to AAA data cited by Reuters.
Diesel is widely used by trucks, farms, trains and industrial machinery, so the price increase is particularly significant for transport and agricultural costs.
The increase is linked to disruptions to global fuel supplies caused by the wars in Iran and Ukraine, including damage to refineries and restrictions on fuel flows through major shipping lanes.
Oil futures fall on export ban report
U.S. ultra-low sulfur diesel futures fell about 4% on Wednesday after the Politico report was released. The October contract had previously fallen more than 6%.
The move was reversed after the White House denied it was preparing a blanket temporary ban on exports.
Why the ban could affect gasoline
A key issue raised by Wright and industry analysts is that diesel and gasoline are produced together in the refining process.
If refiners lose access to overseas diesel markets, domestic storage could fill up quickly, forcing refiners to cut overall output. This could ultimately reduce both gasoline supplies and diesel production.
Goldman Sachs’ Daan Struyven similarly warned that lower diesel prices could encourage refiners to cut production, thereby reducing gasoline availability. Struyven said in an interview with Bloomberg Television on Wednesday. “And since gasoline and diesel are usually produced together as a package with some flexibility, it would likely reduce the availability of gasoline.”
The US is a major exporter of diesel
The United States has become a major supplier of diesel to overseas markets, including Europe and Latin America. Any larger restrictions could therefore have ramifications beyond the US domestic market.
Europe in particular is increasingly dependent on US oil as supplies from Russia and the Middle East have been cut off. Meanwhile, Russia has maintained restrictions on diesel exports, while conflict-related disruptions have limited supplies to the Middle East.
The diesel export debate comes as the Trump administration faces pressure to curb fuel costs ahead of the Nov. 3 election, with high diesel prices affecting farmers, truckers, manufacturers and other businesses.
