The nation’s largest business groups warned President Trump this week about a diesel export ban, saying in a joint letter that such a step would be counterproductive and would raise fuel prices rather than lower them.
The U.S. Chamber of Commerce, Business Roundtable, National Association of Manufacturers, American Petroleum Institute, and dozens of other groups told President Trump that an export ban would “reduce fuel production, tighten supply, and increase costs for American families, farmers, and truckers.”
“While there have been calls by some to ban or limit diesel exports to lower prices, the opposite will actually happen,” the group warned in a letter to Trump on Wednesday.
The letter can be downloaded here
President Trump is facing increasing political pressure from Republican lawmakers in agricultural states such as Iowa to take action to lower fuel prices ahead of the U.S. midterm elections. The national average price for diesel was $6.51 per gallon on Thursday, $2.82 higher than the same period a year ago, according to AAA data.
President Trump said Tuesday that he had advocated for an export ban during deliberations within his administration. This statement surprised the oil industry and business groups.
“We’ve been saying, let’s stop pumping out diesel. We produce a lot of diesel,” Trump told reporters on the sidelines of the United Nations General Assembly in New York. “I’ve been asking for that within my ranks. We’ve been talking about it.”
Feasibility study
Asked by President Trump to brief reporters on what his administration was considering, Treasury Secretary Scott Bessent said the White House was considering whether an export ban was “feasible in terms of overall refining capacity and whether a full ban or a partial ban would work.”
Politico on Wednesday cited unnamed sources as reporting that the administration is preparing a plan to impose a 90-day ban on diesel exports, sending diesel futures and U.S. refinery stock prices down.
But U.S. Energy Secretary Chris Wright told the New York Times late Wednesday that “no one wants a complete ban on diesel or zero exports.”
“That hasn’t been discussed,” Wright told the Times. “What’s being discussed is what’s the most efficient way to get more diesel into the United States and keep the supply of gasoline, jet fuel, etc. at maximum capacity.”
Mr. Wright is an oil industry veteran who previously served as CEO of an oil field recovery company. liberty energysaid the diesel export ban would increase U.S. gasoline prices.
Energy experts say the export ban will cause diesel prices to temporarily collapse in some parts of the U.S., but fuel prices will rise as refiners cut production in response to the restrictions.
Diesel prices have soared after Ukraine’s attacks on Russian oil refineries forced the Russian government to ban diesel exports. Russia was previously the world’s second-largest diesel exporter. A ban on U.S. diesel exports would eliminate the world market’s largest source of supply.
Iran and its Houthi allies have also attacked refineries in the Middle East, and exports through the Strait of Hormuz have been restricted as Iran continues to threaten and attack tankers.
