The White House is edging closer to a 90-day ban on US diesel exports, with Trump reportedly inclined to announce the move by the end of this week. Energy Secretary Chris Wright and other cabinet members have pushed back, but record pump prices and a tight midterm calendar are driving the decision.
The Trump administration is moving closer to a 90-day ban on US diesel exports, with the president said to be inclined to announce the measure before the end of this week. That is according to a Politico report citing five people familiar with the discussions.
Energy secretary says a ban is likely within days
Energy Secretary Chris Wright called energy chief executives on Tuesday night to tell them a 90-day halt was likely within days, according to an energy adviser to the president who cautioned the situation remained fluid. The adviser said the turning point came last weekend, when Iowa Senator Chuck Grassley publicly backed a ban over the damage high diesel prices are doing to farm incomes, prompting similar demands from other farm-state Republicans.
Wright, Treasury Secretary Scott Bessent and Interior Secretary Doug Burgum have all objected to a total ban. Wright has argued that because refineries produce diesel alongside gasoline and jet fuel, blocking exports would eventually force run cuts once storage fills, lifting prices for other fuels. He has suggested voluntary changes to where US diesel is shipped as an alternative to an outright ban.
Diesel prices sit at multi-year highs
The pressure stems from prices at the pump. The average US diesel price stood at around $6.50 a gallon on Wednesday, up about 90 cents in a month and more than $2.80 from a year earlier. The Iran war that began in February has damaged Middle East refineries, while Ukrainian strikes on Russian refineries have further tightened supply.
A ban would be the first restriction on US energy exports since a decades-old crude export ban was lifted in 2015. Diverting cargoes bound for Europe and Asia back into the domestic system could ease US prices in some regions at first, but refiners would likely cut output after losing a major export outlet, pushing prices higher later.
With the midterm elections less than seven weeks away, the decision may rest with whoever is last in the room with Trump. Markets will watch whether any announcement this week takes the form of a full ban or the narrower, voluntary redirection Wright has described.
Source: InvestingLive
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