The country’s most powerful oil, gas and business groups urged President Donald Trump on Wednesday against pursuing any form of diesel export ban, as reports circulated that the White House is increasingly interested in finding a way to tamp sky-high diesel prices.
“We urge you to reject calls to ban or otherwise limit the exports of diesel and other products that have made the U.S. energy industry so strong,” dozens of industry groups, including the American Petroleum Institute, the American Fuel and Petrochemical Manufacturers, the National Association of Manufacturers and the U.S. Chamber of Commerce, wrote in a letter to the president.
“Export bans would lead to less fuel production, tighter supplies, and rising costs for American families, farmers, and truckers,” the groups wrote.
Before now, the American Petroleum Institute has been an especially stalwart champion of the Trump administration’s energy policies and has rarely offered any public rebuke of the president. But the prospect of a temporary export ban has prompted fierce opposition from industry groups.
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Politico reported Wednesday that the White House is preparing a temporary export ban on diesel. The White House denied any such preparations, but some congressional Republicans facing increasingly tough elections this November have called on Trump to enact an export ban to address rising energy prices caused by his war with Iran. Farm state Republicans, already feeling the heat from constituents over the administration’s trade wars, have also been calling for a quick fix on diesel.
“I hope WH doesnt listen 2 Big Oil who claim diesel export ban wont work Big Oil doesnt need 2 charge sky-high diesel prices 4 Iowa farmers + truckers just filling up,” Sen. Chuck Grassley (R-Iowa), who has endorsed the idea of a ban, posted on X Wednesday.
Opposition to an export ban extends to Trump’s own cabinet. Both Interior Secretary Doug Burgum and Energy Secretary Chris Wright have repeatedly dismissed calls from lawmakers for the ban.
“The blunt tool of banning diesel exports definitely doesn’t work,” Wright said at a Climate Week event in New York on Wednesday. “If you can’t export the diesel that comes out of our refineries, you run out of places to store it, and you have to reduce U.S. refining, which would put upward pressure on gasoline prices and jet fuel prices.”
Burgum expressed a similar sentiment earlier this month.
“We would consider an export ban if we thought that actually might lower prices, but that’s not the case,” Burgum said at a G20 ministerial meeting in mid-September.
Diesel export bans are wildly unpopular with the oil and gas industry and with market observers, who generally agree that limits on diesel exports would lead to higher gasoline prices for consumers in the long run.
The diesel market is a global one, with U.S. producers exporting about 30% of what they produce. A ban on exporting diesel to the rest of the world would likely cause domestic producers to cut their production rates, analysts said.
Because diesel and gasoline are produced together, cuts in diesel production could also mean cuts in gasoline production, which would eventually transfer to higher gas prices at the pump.
“If exports are banned, refiners cannot simply stockpile unlimited diesel. They would have to reduce production. Because gasoline and diesel are produced together, producing less diesel also means producing less gasoline,” said an AFPM spokesperson in a statement. “Less fuel production means tighter supplies and higher prices for both diesel and gasoline.”
The ban would likely hurt the Northeast part of the country the most. “Areas of the U.S. that import fuel (primarily the Northeast) would face higher prices for all fuels that would now be in even shorter supply globally. This could not come at a worse time for consumers as home heating oil season is about to begin,” the business groups wrote in their letter.
The United States had a crude oil export ban from 1975 until 2015, when Congress repealed the ban. Since 2015, U.S. oil production has dramatically increased, and the U.S. has transitioned from primarily a petroleum products importer to primarily an exporter. Because the U.S. now supplies the global market, any global export ban would also have a serious ripple effect on prices around the world.
“The bottom line is this: the U.S. is not short of diesel. The world is. A potential export ban treats the global price problem as if it was a U.S. only problem,” wrote Patrick De Haan, the petroleum analyst known as Gas Buddy.
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