White House denies report of 90-day US diesel export ban

The White House on Wednesday (September 23) denied a report 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 a report that the US was considering a temporary, blanket ban on diesel exports was not correct.

The denial 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

US Energy Secretary Chris Wright separately said a blanket diesel export ban would not work and could instead push up prices of gasoline and jet fuel.

“The blunt tool of banning diesel exports definitely doesn’t work,” Wright said at an event in New York on Wednesday.

"What's being discussed is what's the most efficient way to get more diesel into the United States of America, and continue maximum flows of gasoline and jet fuel," Wright said

Wright said restricting exports could leave US refineries with insufficient storage capacity, forcing them to reduce 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 reduce US refining,” he said, adding that this would put upward pressure on gasoline and jet fuel prices.

Trump had backed export restrictions

The White House denial came a day after President Donald Trump said he supported restricting diesel exports as prices surged.

Trump said on Tuesday that he had told his advisers, “let’s not send out the diesel,” while Treasury Secretary Scott Bessent said the administration was examining whether a full or partial export restriction would be feasible.

The issue has created a divide within the administration.

US diesel prices hit record

Average US diesel prices reached about $6.52 a gallon on Wednesday, up roughly 76% from a year earlier, according to AAA data cited by Reuters.

Diesel is widely used by trucks, farms, trains and industrial machinery, making the price surge particularly significant for transportation and agricultural costs.

The increase has been linked to disruptions in global fuel supplies caused by the wars in Iran and Ukraine, including damage to refineries and reduced fuel flows through major shipping routes.

Diesel futures fall after export-ban report

US ultra-low-sulfur diesel futures fell about 4% on Wednesday after the Politico report emerged. The October contract had earlier fallen more than 6%.

The move reversed after the White House denied that it was preparing a blanket temporary export ban.

Why a ban could affect gasoline

A key concern 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 rapidly, potentially forcing refiners to reduce overall output. That could eventually reduce gasoline supplies as well as diesel production.

Goldman Sachs' Daan Struyven similarly warned that lower diesel prices could encourage refiners to cut production, reducing the availability of gasoline. Struyven said Wednesday in a Bloomberg Television interview. “And because gasoline and diesel are usually produced together as a bundle with some flexibility, it would likely reduce the availability of gasoline.”

US is a major diesel exporter

The United States has become an important supplier of diesel to overseas markets, including Europe and Latin America. Any major restriction could therefore have implications beyond the US domestic market.

Europe in particular has become increasingly reliant on US diesel as supplies from Russia and the Middle East have been disrupted. Russia, meanwhile, has maintained restrictions on diesel exports, while conflict-related disruptions have constrained Middle Eastern supplies.

The debate over diesel exports comes as the Trump administration faces pressure to contain fuel costs before the November 3 midterm elections, with high diesel prices affecting farmers, truckers, manufacturers and other businesses.