The White House is reportedly getting closer to implementing a 90-day ban on diesel exports as the ongoing conflict in Iran continues to disrupt energy markets. This comes as diesel prices reach new all-time highs.
According to a report by Politico, the legal framework for such a ban is still under development. However, opinions on the matter vary widely within the administration, as well as among Republicans and oil industry leaders, some of whom have urged the White House to reconsider through direct calls. If enacted, this would be the first diesel export ban since a previous one was lifted in 2015 during the Obama administration.
An oil executive familiar with the discussions indicated that there are two distinct groups within the White House regarding the issue. “One group is driven by an urgent concern about rising pump prices, while the other insists that we need to take action, whatever the consequences,” the executive noted.
The momentum for the diesel export ban increased notably after Iowa Senator Chuck Grassley voiced concerns about the impact of high prices on farmers, urging action from Trump. Additional Republicans, including Iowa Representative Ashley Hinson, have also expressed support for a ban and advocated for an end to the conflict.
On the other hand, critics, such as API CEO Mike Sommers, argue that restricting U.S. diesel exports could exacerbate problems for consumers, farmers, and the broader economy. He stated that an export ban could actually lead to lower fuel production. “If Gulf Coast storage fills up because we can’t access global buyers, refiners might reduce operations, which could also decrease gasoline and jet fuel output,” he explained.
Energy Secretary Chris Wright has also cautioned against an export ban, claiming it could result in immediate increases in gasoline prices. “Implementing barriers to exports will likely reduce production quickly,” he remarked, emphasizing the need for more fuel supply.
In addition to Wright, Treasury Secretary Scott Bessent and Interior Secretary Doug Burgum have expressed their disapproval of a total export ban. Wright reiterated his stance during a Climate Week panel in New York City on Wednesday, stating, “Banning diesel exports isn’t an effective solution. Our country leads in diesel exports, and if we restrict those, we risk having less gasoline and jet fuel available due to refinery reductions.”
The average price for diesel surpassed $6.50 per gallon recently, driven upward by the conflict in Iran and the ongoing war in Ukraine, which has seen increased attacks on Russian energy facilities.
