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What a US diesel export ban could mean for you
Confirmed
In Short: US President Donald Trump supports a ban on diesel exports to ease high fuel costs for consumers.
US President Donald Trump has expressed support for a ban on diesel producers selling overseas, citing surging fuel prices that have hit drivers ahead of the midterm elections.
Diesel prices are near a record high of $6.50 per gallon, up nearly 70% year-on-year, according to the American Automobile Association (AAA).
Trump's comments echo remarks he made at the United Nations General Assembly, where he stated he had called to “not send out the diesel.”
The US is one of the world's leading energy producers, with domestic refineries churning out roughly four to five million barrels of diesel every day.
Between 1.2 to 1.5 million barrels per day of this diesel are exported, making the US a vital supplier to the global market, particularly to Latin America.
Diesel primarily fuels commercial vehicles in the US, such as freight trucks, farm machinery, and cargo trains, which are crucial for transporting goods and construction.
With diesel prices at record highs, farm-state Republicans are calling for limits on diesel exports, generating pressure on the administration.
Restricting exports might lower diesel prices in parts of the US, particularly along the Gulf Coast, but it does not create additional diesel supply.
The US currently supplies about 20% of the world’s global diesel exports, and a ban could exacerbate diesel costs globally.
Restricting US exports would hit an already-tight market with another supply shock, according to the American Petroleum Institute (API).
What this adds
The Trump Administration previously rejected calls from some Republican Senators to ban diesel exports, despite record-high diesel prices hitting American farmers and truckers.
Background
The Trump Administration on Wednesday rejected calls from some Republican Senators to ban diesel exports, despite record-high diesel prices hitting American farmers and truckers.
What's confirmed
- US President Donald Trump has expressed support for a ban on diesel producers selling overseas, citing surging fuel prices that have hit drivers ahead of the midterm elections.
- Diesel prices are near a record high of $6.50 per gallon, up nearly 70% year-on-year, according to the American Automobile Association (AAA).
- The US is one of the world's leading energy producers, with domestic refineries churning out roughly four to five million barrels of diesel every day.
- Between 1.2 to 1.5 million barrels per day of this diesel are exported, making the US a vital supplier to the global market, particularly to Latin America.
- Diesel primarily fuels commercial vehicles in the US, such as freight trucks, farm machinery, and cargo trains, which are crucial for transporting goods and construction.
- With diesel prices at record highs, farm-state Republicans are calling for limits on diesel exports, generating pressure on the administration.
- Restricting exports might lower diesel prices in parts of the US, particularly along the Gulf Coast, but it does not create additional diesel supply.
- The US currently supplies about 20% of the world’s global diesel exports, and a ban could exacerbate diesel costs globally.
- Restricting US exports would hit an already-tight market with another supply shock, according to the American Petroleum Institute (API).
What's still developing
- UK Chancellor John Healey has told BBC News that the UK is in talks with US authorities over a potential diesel export ban and has started preparing for it.
- Trump and his backers say a US diesel export ban would protect domestic consumers from those rising costs, but experts say it could trigger major economic waves both at home and across the world if it were to happen.
- Keep more American-made diesel at home, increase domestic supply, and take some pressure off farmers, truckers, construction companies, and ultimately consumers.
- In a tightly interconnected global market, that means some of the costs pushed overseas can eventually find their way back to American consumers.
- Few industries have more reason to want lower diesel prices than agriculture.
- Diesel powers tractors, combines, irrigation equipment, and the trucks that move crops from farms to processors and markets.
- Fuel oil deficit forecast at 218,000 barrels per day in third quarter as Middle East exports plunge 45%; Singapore bunker prices have risen 76% since Iran war began LONDON: A global shortage of fuel oil used by ships and power plants is looming in the third quarter as war-related refinery and shipping disruptions constrain supplies, while refiners increasingly divert fuel oil towards producing more profitable diesel, gasoline and jet fuel.
- Ukrainian drone attacks have affected Russian refinery operations, pushing the country's fuel oil exports to a record low of 591,000 bpd in August, according to Kpler data dating back to 2017.
- Nigeria's 650,000-bpd Dangote refinery, for instance, has increased exports of diesel, gasoline and jet fuel while reducing fuel oil shipments, according to Kpler.
- Energy Aspects analyst Royston Huan said record-low gasoline and diesel inventories would encourage refiners globally to maximise the use of secondary processing units, consuming more fuel oil as feedstock and further tightening supplies.
- China has also reduced refining capacity and exports as it seeks to conserve domestic stocks.
- The impact is particularly pronounced in fuel oil, which refiners can use as feedstock in secondary processing units to produce higher-value products such as diesel and gasoline.