Trump's Diesel Export Ban Consideration Could Send Australian Prices Soaring
Energy analysts warn of potential rationing and prices above $4 a litre in Australia if the US restricts diesel exports.
The consideration of a U.S. ban on diesel exports by former President Donald Trump could lead to Australian diesel prices exceeding $4 per liter and raise the specter of fuel rationing, according to energy analysts.
Trump has publicly stated his support for halting diesel exports, a move that could have significant ripple effects globally. While Australia does not directly import diesel from the United States, it is a major importer of the fuel on the world market. Energy research firm MST Marquee has predicted that if the U.S. implements a ban, Australia could face a roughly 50 percent increase in diesel prices within weeks.
Saul Kavonic, head of energy research at MST Marquee, told ABC's The Business that a severe U.S. export ban could trigger these conditions. Kevin Morrison, an energy finance analyst, explained to Channel Seven's Sunrise that a U.S. export ban would increase competition for available diesel supplies. "We're going to be in greater competition with the likes of Brazil, China, Turkey, and the EU," Morrison stated, noting that Europe would likely be significantly impacted, driving up prices and leaving Australia to bear the brunt.
As of September 20, average petrol prices across Australia's five largest cities were approximately $2.30 per liter, with diesel prices about 40 cents per liter higher due to Middle Eastern conflict impacting oil shipping routes. Brent crude oil prices have also seen fluctuations, nearing $104 per barrel, with some experts forecasting potential increases to $150 per barrel due to dwindling global stockpiles.
The Australian government has ruled out future fuel excise cuts and rejected a proposal from the Coalition to automatically halve the fuel excise when crude oil prices exceed $100 per barrel for two weeks. Finance Minister Katy Gallagher described the proposal as an "unfunded, uncosted promise," stating the government is focused on more permanent cost-of-living measures.
Morrison also noted that Middle Eastern oil exports have returned to about 80 percent of pre-war levels as of September, suggesting a degree of stability despite ongoing geopolitical tensions.