Experts Warn Trump's Diesel Export Ban Could Backfire, Raising U.S. Prices

President Donald Trump is reportedly considering a ban on U.S. diesel exports as a strategy to combat surging domestic fuel prices, a move that experts warn could have significant unintended consequences, potentially leading to higher costs for American consumers.

The national average price for diesel reached a record $6.53 per gallon this week, according to AAA, a sharp increase from $3.69 a year ago. This surge has fueled concerns about inflation and created political pressure ahead of the midterm elections.

Trump expressed his consideration of export restrictions at the United Nations General Assembly, stating, "I've said, 'Let's not send out the diesel.' We make a lot of diesel."

However, other administration officials, including Energy Secretary Chris Wright, have suggested a less drastic approach, such as voluntary limits on exports to balance domestic needs with global demand. Treasury Secretary Scott Bessent is also reviewing the potential impact of a complete or partial halt to overseas shipments.

Industry leaders and experts have voiced strong opposition to an export ban. Mike Sommers, chief executive of the American Petroleum Institute, stated that "restricting U.S. energy exports would only compound the problem - exacerbating refining challenges and ultimately hurting consumers."

These concerns are echoed by energy analysts who predict that an export ban could increase U.S. gasoline prices by an estimated $0.30 per gallon. Patrick De Haan, head of petroleum analysis at GasBuddy, warned that regular gas prices could reach new all-time highs if a diesel ban is implemented. He noted that average U.S. gas prices are already near $4.50 per gallon, and an additional $0.30 could push them above the previous record of $5.02 set in June 2022.

The potential for price increases stems from how refineries operate. If refiners lose their export markets for diesel, they may reduce the amount of crude oil they process. This reduction would lead to less gasoline being produced, driving up its price. "When they cut back, they make less gasoline too, and that can push pump prices up," explained commodities specialist Drew Rathgeber.

The effectiveness of keeping diesel within the U.S. is also geographically limited. The Eastern Seaboard, for instance, relies heavily on foreign diesel imports due to insufficient domestic pipeline infrastructure. Excess fuel in storage tanks in regions like Texas would not easily or cheaply reach these areas.

Furthermore, removing U.S. diesel from the global market could trigger increased international demand and prices. Nations dependent on U.S. supply would seek alternatives, potentially driving up global oil prices, which could then feed back into the U.S. market. "They would have to find fuel elsewhere, potentially bidding up prices in other markets. That could feed back into the U.S. market rather than insulating it from higher prices," cautioned freight operations expert Jennifer Lockett.

Experts suggest that the fundamental issue lies in a lack of refining capacity. The U.S. has not opened a new refinery since 1977. Vince Stanzione, CEO and founder of First Information, noted that the country needs more refining capacity rather than export bans to address the energy supply challenges.

Amidst global supply chain disruptions, including the conflict in the Middle East and attacks on Russian refineries, U.S. diesel stockpiles have fallen significantly. American refineries have increased foreign deliveries by over 30 percent to meet international demand, a practice that Energy Secretary Wright has warned could lead to immediate price increases for gasoline if disrupted.