Trump Backs Diesel Export Ban Idea as Prices Hit Records

Key Facts

President Donald Trump said Tuesday that he supports the idea of halting US diesel exports and has raised it within his team. The comments endorse a policy option under discussion, not an operative ban, after a White House official said a day earlier that export restrictions were not then under consideration.

Energy Information Administration data show the source of the political pressure. The US average retail diesel price reached $6.285 a gallon in the week ended September 11, up $0.318 from the previous week and $2.546 from a year earlier. Distillate inventories stood at 107.9 million barrels, rising 1.6 million barrels on the week but remaining 13.5% below their year-earlier level.

The squeeze reflects a global refined-fuel shortage, not only US conditions. The International Energy Agency said US diesel and gasoil prices exceeded $200 a barrel in early September, 94% above pre-war levels. Combined net exports from the Gulf and Russia fell by 1.6 million barrels a day in August from February, when the two regions accounted for about 45% of global seaborne trade.

An export ban could initially retain more diesel near US refining centers and lower prices in regions able to absorb that supply. The effect would be uneven because transport links between the Gulf Coast and coastal markets are limited. Losing export outlets could also prompt refiners to reduce runs, cutting output of diesel, gasoline and jet fuel and eroding part of the initial benefit.

The policy direction remains unsettled. Interior Secretary Doug Burgum said on September 14 that a fuel-export ban was unlikely to lower prices and could trigger retaliation that harms import-dependent markets such as California. The next test is whether the White House turns Trump's comments into a formal proposal, while the EIA's next weekly report is due September 23 with updated inventory and supply data.