US Energy Secretary Chris Wright said a ban on diesel exports would not work and could push up gasoline and jet fuel prices, breaking with President Trump, who backed the idea a day earlier. The split comes as US diesel prices sit at a record high and crude oil trades near $100 a barrel amid the wars in Iran and Ukraine.
Wright breaks with Trump on export ban
US Energy Secretary Chris Wright said Wednesday that banning diesel exports would not work, putting him at odds with President Trump, who backed the idea Tuesday. Wright made the comments at an event in New York.
According to Reuters: "The blunt tool of banning diesel exports definitely doesn't work", Wright said. He added that refiners would run out of storage space if they could not export diesel, forcing lower refining rates that would push up gasoline and jet fuel prices.
Record diesel prices, oil near $100
Trump said Tuesday on the sidelines of the UN General Assembly that he would support a ban on diesel exports, arguing it could have only a modest effect on gasoline prices. The move follows a surge in US diesel prices to an all-time record of $6.52 a gallon, according to AAA.
Brent crude futures hovered near $100 a barrel on Wednesday, while WTI futures traded around $90 a barrel.
Analysts warn of tighter supply
Citi analysts said Wednesday that a US diesel export restriction could tighten global supply further and benefit Asian refiners. Wall Street argues that US refiners could not process all the trapped domestic fuel, reducing total supply; Gulf states could see initial relief, while other regions that depend on fuel imports would see pump prices spike.
Those costs would boomerang back on the East Coast and, to a lesser extent, the West Coast, since those regions rely on imports, said Garrett Golding, assistant vice president for energy programs at the Federal Reserve Bank of Dallas, on X. Lower refining rates could also mean even higher gasoline prices, said Patrick De Haan, head of petroleum analysis at GasBuddy.
Regular gasoline hovered near a seasonal national average high of $4.47 a gallon on Wednesday.
Sources: Commodities & Futures News, Yahoo Finance
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