Republicans from agricultural states are feeling anxious, and it’s hard to ignore why. With less than two months until Election Day on November 3, diesel prices have hit record highs as harvest season begins, and there seems to be little hope for relief. Iowa Senator Chuck Grassley is urging for an embargo, Tennessee Representative Tim Burchett recently introduced a bill to ban exports, and Senate Majority Leader John Thune is “open to exploring” this idea. Even Louisiana Governor Jeff Landry, whose state has a significant refining industry, has suggested a 90-day pause on exports.
This kind of response is understandable given the circumstances. But, I mean, it’s also a pretty risky move.
Energy markets aren’t as simple as just locking up diesel at home to keep prices low while refineries keep working at full capacity, ignoring necessary maintenance. In the U.S., plants produce roughly 5.3 million barrels of distillate a day while domestic demand hovers around 3.6 million. That surplus gets exported because, well, that’s how the system was structured many years ago. Gulf Coast refineries cannot simply stockpile excess; they are running at full capacity. When exports stop, refineries might cut production, and that isn’t just bad for diesel—gasoline and jet fuel are also affected, since they all come from the same crude oil. Energy Secretary Chris Wright summed it up well: restricting flows means less overall supply, and naturally, “we need more supply, not less.” He pointed out that a diesel embargo would lead to “more expensive gasoline right away.”
Interior Secretary Doug Burgum was even more direct, mentioning that imposing export limits would be economically, geopolitically, and, frankly, financially detrimental. He’s not confident that such a ban would lower prices, and it could actually harm Americans in regions that rely on imports.
This last point is crucial because a ban wouldn’t create a single national price. Instead, Texans, Louisianans, and some Midwesterners might see a temporary drop, but then prices would bounce back once refiners are forced to cut back due to diminished markets. The East and West Coasts would likely suffer because they can’t easily absorb supplies from the Gulf due to logistical challenges. Bob McNally of Rapidan Energy Group described the ban as a “sledgehammer,” noting the coasts would be significantly impacted.
He’s got a point.
We can’t just chant about being energy dominant when things are tough for farmers and then flip the script when prices rise. It’s about maintaining production, developing infrastructure, and having the commitment to engage with global markets, enabling U.S. refiners to operate efficiently and stay profitable. It’s been decades since a new refining facility has been built in the country—since 1977, to be exact—and sending a message that the government might restrict exports during tough times won’t encourage any new investment. Some refiners might struggle to survive a rapid exit from their most lucrative markets, and those that do remain may hesitate to invest in expansions in the future.
Rising diesel prices are indeed a genuine issue for farmers and truckers, reverberating through grocery prices and consequently impacting all consumer goods. No one should downplay that reality.
But it’s also crucial to recognize that domestic exports are not the root of the pricing problem. The true cause lies in a global refining shortage prompted by conflicts in multiple regions, including the ongoing war in Ukraine and drone strikes impacting Russian facilities, alongside significant disruptions in the Middle East. Suggesting that American refiners are deliberately overcharging farmers in Iowa is simply absurd and leads to poor public discourse. What we need is more supply, not less—keeping refineries operational, continuing exports, and steering clear of using critical fuel as a political pawn during election cycles.
The reality is that high diesel prices will likely remain as long as the wars in Ukraine and Iran are unresolved. Until those circumstances change, Congress really needs to refrain from making things worse—like implementing an export ban.
