John Thune Considers Diesel Export Ban as Prices Hit Record

U.S. diesel fuel prices reached a record average of $6.27 per gallon on Tuesday, prompting John Thune, the Senate Majority Leader, to announce he is open to exploring a ban on diesel exports. Thune suggested that restricting exports could be a viable solution to reduce domestic price pressure if the U.S. possesses the necessary supply. The price spike follows a period where averages hit $5.85 per gallon, creating significant financial pressure for agricultural producers and consumers.

The crisis is driven by a global diesel shortage exacerbated by Russian export bans, Ukrainian attacks on Russian refineries, and limited refinery capacity following the COVID-19 pandemic. The Energy Information Administration reported that U.S. distillate inventories are currently 13% below their five-year average. While crude oil costs have remained relatively stable, refinery margins have increased from approximately $1 to over $2 per gallon due to high export incentives.

The Trump administration has signaled skepticism toward an export ban. Interior Secretary Doug Burgum stated that such bans on fuels or crude oil would likely not lower retail energy prices. Jarrod Agen of the National Energy Dominance Council indicated the administration is instead pursuing energy deals to lower costs. Market analysts warn that a ban could stress U.S. refiners and drive global diesel prices higher, echoing the gasoline peaks that preceded the 2008 Great Recession.