Diesel prices have been rising in recent weeks as Ukraine strikes oil refineries in Russia. This endless war has now well surpassed World War II.
Big Oil faces an intense disagreement with the GOP, as more GOP candidates back a temporary ban on diesel exports.
Congress steps in…
The disagreement is driven by Ukrainian strikes on refineries in Russia. The rift became public this week when Sen. Chuck Grassley (R-IA) became the most prominent Republican to back the proposal. He is Senate pro tempore.
Last week, Senate Majority Leader John Thune, R-S.D., told reporters he was “open to exploring” an export ban. Other Republicans in Congress have more openly called for an export ban.
Sen. Chuck Grassley, R-Iowa, said the prices “ARE KILLING FARMERS’ INCOME” in a post on X.
However, Trump administration officials have been lukewarm on the idea. Last week, Interior Secretary Doug Burgum told reporters his department would “consider an export ban if we thought that actually might lower prices, but that’s not the case.”
The average cost of diesel stands at $6.52 a gallon as of Wednesday, according to AAA – an increase of more than 80% from a year ago in the hardest-hit states, many of them competitive in the November midterm elections.
The American Petroleum Institute and other industry groups have warned loudly that a diesel export ban would backfire and ultimately raise gas prices due to shifts in production.
A quick decision is coming…
A White House spokesperson told Reuters on Wednesday that the Trump administration was not working on a 90-day ban. Politico reported it was.
He said he isn’t, but they discussed it before throwing it out to Scott Bessent.
Earlier in the day, Energy Secretary Chris Wright rejected the idea, predicting it would eventually drive up gas and jet fuel prices.
Bessent said the administration was “examining” the idea’s feasibility, including whether a “full or partial ban would work”—although the Cabinet secretary did not offer further details about when the administration could issue such restrictions.
President Trump promised to make a quick decision.
Here’s what Big Oil is saying…
Wall Street Journal Editorial Board: “Diesel would pile up in Gulf Coast storage, prompting refineries to reduce run rates. That would lower the production of gasoline and jet fuel, whose prices would rise.”
Sen. Ted Cruz (R-Texas): “It would have massive harm to the refining industry. We refine more diesel than we consume, and it would end up forcing refiners to reduce production. So it would backfire badly.”
Bob McNally, Rapidan Energy Group: “If diesel exports are banned, refiners will drop runs… They will therefore make less gasoline… So, I think you’d see a real drop in refined product output in the United States. And the shortage would just be intensified globally.”
Ryan Young, Competitive Enterprise Institute: “There are no short-term fixes for high diesel prices. Export bans would politicize energy markets and invite retaliation while failing to solve the fundamental problem of scarcity.”
Sen. Lisa Murkowski (R-Alaska): She questioned whether disrupting global markets was justified for a “short-term” benefit “that doesn’t really move the needle.”
Garrett Golding, Federal Reserve Bank of Dallas: “For refineries that can no longer export diesel, they will quickly fill local storage capacity and be forced to reduce their run rate — the amount of crude they refine and turn into products. This is a major problem because a barrel of crude is refined into multiple products.”
Dan Brouillette, Former Energy Secretary: “Over a year ago the administration lifted the Biden pause on the export of LNG. They banned it for a period of time. The arguments that they made there were that it would deny investment in this important industry, which was an incredible industry that was growing by leaps and bounds. The same thing is going to happen here. It’s a terrible investment signal to send to this industry. But even more importantly, even with regard to the price of diesel in America today, which is quite high, it will do nothing to lower that price in the near term.”
Kenneth Medlock III, Baker Institute for Public Policy: “Banning exports of diesel would drive refiners to cut runs because the physical market they can access would be cut, and no market participant in any market sells product at a loss. While an export ban might have a very short-term impact that lowers price, it would not be long-lived…”
Sen. John Cornyn (R-Texas): “It’s a gimmick.”
Patrick De Haan, GasBuddy: “Keeping distillates and diesel home does not change the world price that reference our prices. You can’t fence off a globally traded commodity by executive order and expect the global price to stop applying to it. … A potential export ban treats the global price problem as if it was a U.S. only problem, and the cure would be far worse than the disease.”
Liam Denning, Bloomberg Opinion Columnist: “It would be ironic if ‘energy dominance,’ Trump’s mantra built around the leverage offered by rising US oil and gas exports, should degenerate into a form of energy expedience that blocks those exports.”
Sen. Alan Armstrong (R-Okla.): “Super clumsy.”
Kevin Book, ClearView Energy Partners: “This is a global problem. There’s no US-only solution to this.”
Grover Norquist, Americans for Tax Reform: “An export ban would hurt Americans. U.S. refiners make ~5.3M barrels a day. Americans use ~3.6M. If we ban exports, refiners won’t stockpile the surplus, they’ll just cut production. Lower supply means higher prices.”
Jason Bordoff, Columbia University Center on Global Energy Policy: “This is a bad idea.”
Rep. Vicente Gonzalez (D-Texas): “Diesel is priced on a global market. And I don’t know that that would be the best idea… We need to talk to energy companies and see if we can fix the problem without an actual diesel export ban. There may be ways to adjust prices within the borders of the country without actually having to stop energy companies from exporting energy. I’m not one to impede commerce and trade.”
Douglas Holtz-Eakin, American Action Forum: “If U.S. politicians wanted to do something useful, they should focus on reforms that would make it possible to build new refinery capacity in the United States and build it closer to regional demands. That might make a difference. A diesel export ban is as empty as a gas tax holiday. But that won’t stop its momentum.”
Stephen Moore, Unleash Prosperity: “Banning diesel exports won’t lower the price at the pump, it will raise it. You don’t fix a shortage by telling American refiners to make less. We tried export bans in the 1970s. They failed then and they’ll fail now. Produce more, permit faster, refine here.”
Dan Eberhart, Canary Energy CEO: “It’s understandable that the administration is attempting to bring down prices by any means necessary, but an export ban would be counterproductive.”
Ron Bousso, Reuters Columnist: “The trouble is that a diesel export ban would likely aggravate the very problem it is designed to solve… a diesel export ban would not just fail to create more fuel, it could eventually discourage production.”
Jason Isaac, American Energy Institute: “The fact is, diesel is a global commodity. You can’t ban its exports without disrupting markets, hurting American producers, disrupting supply chains, and inviting retaliation from other countries.”
Vance Ginn, Former OMB Chief Economist: “The better response to high diesel prices is not an export ban, which will make the situation worse; it’s more supply and fewer government-created costs.”
Jim Mitchell, Wood Mackenzie: “That would seem pretty damaging to some key U.S. allies.”
Scott Lincicome, Cato Institute: “Terrible news, terrible policy, terrible effects. Just terrible all around.”
Christopher Johnson, American Energy Leadership Institute: “Diesel export bans are one of the dozens of ideas that sound good until you think about it for more than five seconds.”