The cost of diesel fuel is breaking records, with spillover effects for the cost of groceries and other goods. President Donald Trump is reportedly contemplating a possible solution: a 90-day ban on exports of diesel from U.S. refineries. Experts warn the move could backfire.
‘Most important fuel on the planet’
The idea of an export ban is “quickly gaining traction with more Republicans” ahead of the midterms, said The Wall Street Journal. The United States “produces more fuel than it consumes,” and diesel exports have risen by 31% since the war began. Some officials see a halt to overseas sales as an easy way to ease price pressures. “High diesel prices ARE KILLING FARMERS INCOME,” Sen. Chuck Grassley (R-Iowa) said on X.
But oil companies are likely to “lose money” if exports are banned, said the Journal. The White House should not create “new restrictions that risk making a difficult situation worse,” American Petroleum Institute’s Mike Sommers said to the outlet. A decision will happen “fast, one way or the other,” Trump said Tuesday to reporters, per the outlet.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
SUBSCRIBE & SAVE
Sign up for The Week's Free Newsletters
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Latest Videos FromThe Week
Diesel is the “most important fuel on the planet” given that it powers “trucks, trains, tractors and ships at the heart of the modern economy,” said CNN. The Iran war is not the only reason for the price spike: Ukraine has “knocked out a series of refineries in Russia,” and Russia and China have both imposed their own export restrictions.
Experts warn that while an export ban might be “quite effective at lowering prices” in the short term, it would also “jack up gasoline prices, crush U.S. refiners and damage America’s reputation as a reliable energy superpower” over the long run, said CNN. Domestic refiners deprived of overseas markets would “logically pull back on how much crude they process into fuel.” That would ultimately cause domestic fuel costs to “soar,” oil consultant Andy Lipow said to the outlet.
Food supply ‘could be disrupted’
An export ban “could create supply-chain messes elsewhere,” said the Atlantic Council. Latin American countries rely on U.S. diesel imports. “U.S. food supply chains could be disrupted” if farmers are suddenly unable to fuel their machinery. Mexico in particular is a top supplier of “fresh produce, including citrus fruits, tomatoes, avocados and berries.” A kink in the diesel supply would “degrade Mexico’s ability to plant and harvest the crops the U.S. imports.”
The issue pits “Big Ag and Big Oil” against each other, said Politico. High diesel prices are “driving up the price of harvesting crops.” GOP officials in farm states are “desperate” for action, though that means “crossing their traditional allies in the oil and gas sector.”
An outright ban may not occur, however. The Trump administration would prefer voluntary restrictions, Energy Secretary Chris Wright said Wednesday to The Wall Street Journal. White House officials are “trying to avoid a blunt hammer of a government policy.”
