White House Prepares 90-Day US Diesel Export Ban as Prices Hit $6.52 a Gallon

The Trump administration is preparing a 90-day ban on US diesel exports, according to a Politico report, as diesel prices average $6.52 per gallon, up $2.83 from a year ago, intensifying political pressure ahead of the November midterm elections. President Trump has expressed support for the move, and the White House is said to be targeting an announcement by week's end, though the legal process for implementing such a ban remains unclear.

The proposal immediately jolted energy markets: US diesel futures sank more than 7% to an intraday low on the news, while European diesel futures surged more than 7% to a session high, reflecting fears that American supply, which is critical to European markets, would be cut off. Analysts described any suspension of US foreign diesel sales as "catastrophic" for global supplies.

The plan faces fierce opposition from within the administration and from the oil industry. Energy Secretary Chris Wright said a ban "definitely doesn't work" and warned it could raise gasoline prices as well, since reducing export incentives would ultimately throttle refinery output. The WSJ reported that Wright floated the idea of a voluntary cap on diesel exports as an alternative to an outright ban. Major industry groups and some Republican lawmakers are still pushing back in hopes of staving off a formal announcement.

Analysts and Barron's warn that the measure would likely backfire, with reduced refinery profitability potentially pushing more refining capacity out of the market in the fourth quarter, tightening domestic supply and lifting prices for gasoline and jet fuel rather than easing them. The administration has yet to resolve how it would legally execute the ban.