The oil industry warns that a ban on diesel exports could backfire and worsen the global fuel crisis as President Donald Trump considers regulations.
President Trump, who faces growing political pressure over soaring fuel prices ahead of November’s midterm elections, appeared to support the export ban earlier this week.
“We’ve been saying, let’s stop pumping out diesel. We produce a lot of diesel,” Trump told reporters on the sidelines of the annual United Nations General Assembly on Tuesday. “I’ve been asking for that within my ranks. We’ve been talking about it.”
The American Petroleum Institute, an oil lobbying group, quickly pushed back after Trump’s comments. API CEO Mike Somers warned that “restrictions on U.S. energy exports will only exacerbate the problem, further exacerbating refining challenges and ultimately harming consumers.”
“The answer is more supply and greater flexibility, not new restrictions that risk exacerbating a difficult situation,” Somers said in a statement on Tuesday.
US refiner stocks Valero, marathon oil and phillips 66 Stocks fell on Wednesday after Politico reported that the Trump administration is preparing a 90-day ban on diesel exports.
But Energy Secretary Chris Wright told the Wall Street Journal that the Trump administration is considering restrictions rather than a complete export ban.
“We are trying to understand the complexities of refining and avoid the blunt hammer of government policy,” Wright told the Journal on Wednesday.
gas prices will rise
The Energy Secretary said last week that the export ban would “immediately make gasoline more expensive.” Wright, an industry insider who previously served as CEO of an oilfield services company, said U.S. refineries will cut production, including gasoline, as storage tanks fill up. liberty energy.
“As soon as you start putting barriers in the flow, you’re going to see less production and less supply,” Wright said in a Sept. 17 interview with the Daily Caller.
Oil industry executives told CNBC’s Brian Sullivan that the diesel export ban could increase fuel prices by 30 cents a gallon. GasBuddy’s head of petroleum analysis Patrick de Haan said in a social media post that petrol prices could rise towards record levels if the export ban is implemented.
Bob McNally, president of Rapidan Energy and a former energy adviser to President George W. Bush, said an export ban would lead to a temporary price crash, but would likely be limited to the Gulf Coast and Midwest, where refining capacity is abundant. The northeast is unlikely to see much relief as it is highly dependent on imports, analysts said.
McNally said that after some temporary relief in some parts of the U.S., prices will likely rise above normal as refineries cut production. Prices will be “higher globally,” he said.
There is also a risk of retaliation from U.S. trading partners, McNally said. The US exports diesel to Europe, and the Europeans export gasoline to the US.
The oil industry is concerned that Europe could ban gasoline exports to the United States, the analyst said. This will be especially problematic for the northeastern United States, which is highly dependent on imports, he said.
electoral pressure
But with diesel prices reaching record highs ahead of the midterm elections, the White House faces increasing pressure from a growing group of Republicans to implement the export ban.
Last weekend, the White House’s Sen. Chuck Grassley (Iowa) instituted a “diesel embargo” to help farmers. Iowa is one of the nation’s largest agricultural states, where diesel is essential for agriculture, and Republicans face a tight Senate race despite voters supporting Trump three times in the Hawkeye State.
The national average price for diesel was $6.52 a gallon on Wednesday, nearly $3 more than this time last year, according to AAA data. Gasoline prices were $4.47 per gallon, $1.30 higher than at the same time in 2025.
“It’s panic,” McNally said. “The election is tough and diesel prices are at historic highs. It’s total panic.”
It is not yet clear what action President Trump will ultimately take.
The White House is considering whether an export ban is “feasible in terms of overall refining capacity and whether a full ban or a partial ban would be effective,” Treasury Secretary Scott Bessent said Tuesday when asked by President Trump to explain the government’s considerations to reporters.
A White House official told CNBC on Wednesday that President Trump “wants the price of gas at the pump to go down and is considering all options on the table.”
One of the main reasons why diesel prices are so high now is Russia’s ban on exports following Ukraine’s attack on its refineries.
Moscow’s ban removed the second largest source of diesel from the world market. A U.S. export ban would further exacerbate the problem by removing the largest source of diesel from the market.
“I don’t know of any oil economists or experts or analysts who actually understand oil who think it’s a good idea,” McNally said. “I think there is widespread opposition even within the administration.”
