American Petroleum Institute: Diesel Export Ban Would Drive Up Domestic Oil Prices
nashnova research
Trump voiced support for banning U.S. diesel exports to lower domestic prices, but the American Petroleum Institute and multiple analysts warn the ban would force refiners to cut output — raising prices for gasoline, jet fuel, and every other product that comes out of a refinery.
How high have diesel prices climbed?
AAA data shows the national average diesel price hit $6.53 per gallon, a record high.
That is roughly 75% above the level a year ago.
This means → diesel is already at an extreme. Any policy that tightens supply further risks making things worse, not better.
Why does Trump want to ban diesel exports?
At the UN General Assembly, Trump said he supports a ban on U.S. diesel exports, arguing it would help bring down domestic fuel prices.
He added the government would decide "very soon, in some form."
In plain terms = the logic sounds intuitive — keep diesel at home, prices should fall. Industry groups and analysts say that logic breaks down in practice.
Why does the industry say the ban would backfire?
The American Petroleum Institute (API) warned that a ban would cause surplus diesel to fill up Gulf Coast storage tanks.
Once tanks are full, the only way to stop the surplus is to cut crude processing volumes.
This means → refiners would not just produce less diesel — output of gasoline, jet fuel, and other products would drop in lockstep, at a time when global supply is already tightening.
What do analysts say about the ban?
Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities, said bluntly: the ban would not increase domestic supply — it could reduce it, pushing prices higher.
He stressed the core driver of high diesel prices is the Iran conflict — "end the war, open the Strait of Hormuz (the chokepoint linking the Persian Gulf to the Indian Ocean), and diesel prices come down on their own."
Ipek Ozkardeskaya, senior analyst at Swissquote, noted the U.S. is the world's largest diesel exporter. Restricting exports would push global diesel prices up directly, and refiners, losing part of their export market, may choose to cut production.
Who would be hit hardest?
Bespoke Investment Group flagged a disproportionate impact on New England.
Canada currently sources nearly half its diesel consumption from the U.S. A ban would force Canada to buy from other countries at higher prices.
This reflects a transmission chain easy to overlook: the ban would not just affect the U.S. domestically — it would disrupt the North American supply network and push fuel costs higher along the U.S.–Canada border.
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