Trump Threatens Diesel Export Ban Amid Record Fuel Prices
President Donald Trump is considering a diesel export ban to lower domestic prices after retail costs hit record highs amid global supply constraints.
Retail diesel prices in the United States reached a record average of $6.41 per gallon on September 30, a 70 percent increase since the war with Iran began on February 28. In response, Donald Trump is considering a ban on diesel exports to reduce domestic costs ahead of the November midterm elections.
The Trump administration has warned France and Germany to release 120 million barrels of emergency diesel inventories over the next six months or face the export ban. U.S. officials expressed frustration over the failure of these European nations to honor previous commitments to release petroleum stocks. This pressure comes as Europe remains dependent on U.S. fuel following bans on Russian imports and disruptions in West Asia.
Global supply remains constrained despite crude oil flows through the Strait of Hormuz returning to prewar levels of 13.5 million barrels per day. The Federal Government of Russia extended its own export ban on diesel and gasoil through October 31 following Ukrainian drone attacks on Russian refineries. These disruptions, combined with refinery outages in Asia and the Middle East, have removed roughly 10 percent of the global seaborne diesel supply.
Further instability is driven by diminished global oil buffers. The United States strategic reserve has fallen to its lowest level since 1982 after withdrawals of over 130 million barrels. Additionally, increased oil imports from China and trader fears regarding the conflict with Iran have kept crude prices near $100 a barrel.
