Market Flux Event
TotalEnergies CEO Warns US Diesel Export Ban Would Backfire by Lifting Gasoline Prices
Read this in the Market Flux appPresident Donald Trump is actively considering a ban on US diesel exports as his administration seeks to combat high domestic fuel prices, but TotalEnergies chief executive Patrick Pouyanne warned the measure would likely backfire. Because refineries produce diesel and gasoline jointly and cannot make one without the other, restricting diesel exports would cause storage tanks to fill rapidly, eventually forcing a broad cutback in refinery output that would drive gasoline prices higher, not just diesel prices.
Energy analyst John Kemp echoed that view, noting that a total export embargo is technically unworkable: a full ban would risk creating domestic gasoline shortages, making it unlikely the government could enforce or sustain such a policy. Kemp argued that if Washington acts, it is more likely to pursue a quota system or industry-voluntary limits rather than an outright ban.
Meanwhile, international oil executives gathered at the ROG.e conference in Rio de Janeiro this week largely looked past Trump's claim that "the biggest oil companies in the world are going in" to Venezuela. Shell, the largest private-sector producer in Brazil with equity output of about 500,000 barrels per day, sees Brazil as the more compelling opportunity. Shell CEO Wael Sawan cited Brazil's deepwater resources, stable regulatory environment and favorable geography, saying the country has "the optionality and flexibility to not just support Brazilians but also support the rest of the world in the export of energy." Sawan also warned that growing disruption from the Russia-Ukraine and US-Iran conflicts will present a multi-month challenge to global supplies.
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Sources
- StaunovoA US ban on diesel exports that’s under consideration by President Donald Trump to combat high prices would probably backfire by impacting gasoline prices, the boss of French oil major TotalEnergies said #oott
- JKempEnergyU.S. diesel export controls would threaten domestic gasoline supply U.S. gasoline production would likely be disrupted causing prices to rise if the government bans or severely restricts exports of diesel because refineries make both fuels jointly and cannot make one without the other. If the federal government were to impose an embargo or strict quota limits on diesel exports, the rapid filling of storage tanks would eventually force a downturn in the production of allfuels not just diesel. Because of the technical constraints and risk of creating gasoline shortages, the government is unlikely to enforce a total ban or maintain it for very long. To avoid creating a gasoline shortage, the government is likely to prefer some form of quota system or voluntary limits by the industry ... This is a short extract from my newsletter emailed to clients earlier today. If you would like to read my newsletters in full, three times a week, you can subscribe via my website
- Tleilax___Indonesia is having trouble to export more coal given they own shortage of natural. Plus Capesize vessels are quite expensive at the moment.
- oilprice.comThe World Is Entering a New Era of Energy Security
- BusinessA US ban on diesel exports that’s under consideration by President Donald Trump to combat high prices would probably backfire by impacting gasoline prices, the boss of French oil major TotalEnergies said
- SemaforThe continent’s dependence on diesel has emerged as a coping mechanism to a persistent shortfall in grid-supplied electricity. But while diesel generators provide more reliable energy, their dependence on imported fuel leaves consumers at the mercy of volatile global pricing. Read more: