“I’ve said let's not send out the diesel—we make a lot of diesel,” President Donald Trump said as he met with Ukrainian President Volodymyr Zelensky in New York on Tuesday. “That could have a little bit of an effect on regular automobile gasoline because when you do that, you know, it’s a sort of a flow.”
Diesel recorded its highest average price on Tuesday amid the energy dearth caused by the war, averaging about $6.53 per gallon, according to the American Automobile Association. It is at least 90¢ higher than last month’s average, and a huge leap from the $3.75 mean just before the war.
Trump referred to Treasury Secretary Scott Bessent, who said that the Administration is examining whether a diesel export ban is “feasible in terms of the overall refining capacity and whether a full or partial ban would work.”
Rising costs present a problem for an increasingly unpopular Trump heading into the November midterms, where the Republican Party he leads has to defend its slim majority in Congress. Disgruntled voters, according to some polls, believe the U.S. economy has suffered under Trump’s policies, with many from the GOP also souring on them.
But since diesel is traded globally, prices in the U.S. are shaped by this balance of supply and demand. The recent price surge has been linked to production and shipping disruptions from the wars in Ukraine and Iran.
Senate Majority Leader John Thune of South Dakota also indicated that he was “open to exploring” a diesel export ban to lower prices.
While the ban is expected to “almost certainly” push prices down for consumers in the Gulf Coast and the Midwest, it may pull prices up for those on the West Coast. “If the global price of diesel rises and supplies in the heartland cannot be routed to the coasts quickly enough, then these regions could see higher prices,” the analysts wrote. They also warned of knockon effects including a possible uptick in grocery prices.
Refineries will also have to reduce their run rate—the percentage of a refinery’s maximum capacity used to process crude oil into refined products, Golding added. This would lead to reduced production of gasoline, jet fuel, and other refined products, “which means higher prices.”
The API opposes a ban and argues that doing so risks “making a difficult situation worse.” President and CEO Mike Sommers said in a statement, “We understand the administration is looking at every option to deliver relief, but restricting U.S. energy exports would only compound the problem—exacerbating refining challenges and ultimately hurting consumers.”
Politics fuels energy policy
Outgoing Senator John Cornyn of Texas, the largest oil-producing state in the U.S., claimed that the ban is a “gimmick.”
Senator Mike Rounds of South Dakota also expressed criticism and said he is instead looking to other options, including restarting idled refineries. “The bigger problem we’ve got right now is, as I understand it, in California, we’ve already lost two more refineries because of California’s strict environmental rules,” Rounds told the Hill. “I would like to get those back up and operational again.”
The reactions exhibit how keen Republicans are to appear that they are providing solutions to the rising costs of living. As Reuters’ energy columnist Ron Bousso put it, fuel costs are increasingly becoming a political liability, and for the wider GOP, “a politically popular ‘quick fix’ may prove difficult to resist.”
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