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Yves here. This post is in part to correct some potentially misleading information on a possible diesel export ban that your humble blogger took from oil expert Rory Johnson on Mario Nawfal’s show.
As the headline indicates, US restrictions on diesel exports are still in play, but forgive me for starting first with the possible impacts and then the apparent state of play.
This is not the first time I have found Johnson to have odd gaps in his presentation. What Johnson said when Trump suggested he might impose a diesel export bank was not inaccurate but was incomplete.
Johnson argued that if Trump were to ban diesel exports, since the US is structurally a diesel exporter, refineries in as little as two weeks would go from have more demand than they could satisfy to having too much diesel output. It would not take very long for them to start cutting production…..which would then bring prices back up. Johnson instead argued for a cap on exports, conceding that it would be an administrative nightmare to implement.
However, what Johnson did not point out was that refineries are tuned not just to take a certain mix of petroleum inputs, but also outputs. Cutting production in response to a diesel export ban would result in lower gas production, as in higher prices. We’ll give more detail on that below
On top of that, the US diesel ban would spike prices in Europe in particular as well as much of the rest of the world, leading to higher prices in the parts of the US that import diesel. Both the east and west coast lack sufficient refining capacity to serve area needs and thus import diesel.
Needless to say, Trump’s diesel ban trial balloon quickly attracted a lot of potshots. From a Wall Street Journal exclusive, Behind the Oil-and-Gas Industry’s Blitz to Try to Defeat a Diesel Export Ban:
Shortly after Trump made his suggestion Tuesday, Mike Sommers, chief executive of the American Petroleum Institute, the industry’s top lobby, issued a statement condemning the move. He said restricting U.S. exports “would only compound the problem” of rising diesel costs. API also issued a press release on the dangers of an export ban…
Around the same time, a loose group of CEOs affiliated with API and the American Fuel & Petrochemical Manufacturers, a trade group that represents refiners, sprang into action….
ExxonMobil and Valero are among the other companies involved in the effort, according to people aware of the interactions. The industry has also been able to rely on Sen. Ted Cruz of Texas and Louisiana Republicans.
The full-throated offense comes as the industry sees an existential threat to its business. Oil-and-gas producers sell a large chunk of their product to refiners, who then turn it into fuel and export it. Bottling up diesel production risks congesting the whole energy chain—and could cost the industry billions of dollars.
And the industry noise plus European diesel prices spiking led to a retreat. From the Journal yesterday, in U.S. Considers Diesel-Export Restrictions, Not a Ban, Energy Secretary Says:
Energy Secretary Chris Wright said the Trump administration wouldn’t outright ban exports of diesel but rather implement restrictions.
In an interview with WSJ Journal House on the sidelines of the United Nations General Assembly, Wright said the administration wouldn’t stop all exports of diesel. He said the administration has to keep the world supplied with diesel but needs to change the trajectory of prices in the U.S.—and the plan would be voluntary.
President Trump said Tuesday that the administration was considering restricting diesel exports, sending the oil-and-gas industry scrambling. It has been desperate to avoid a ban, warning that it risked throttling supplies of diesel and gasoline in the U.S. and would lead to higher prices.
Voluntary? Tell me how that is supposed to work. Will Trump jawbone the big refiners?
Now to the promised detail about how a diesel export ban would in not that much time raise US gas prices:
If you ban diesel exports, this is what happens:
1) Without the overseas market, diesel inventories start to accumulate domestically. This temporarily puts downward pressure on wholesale prices in the US, likely more so in the Gulf Coast than anywhere else. HOWEVER— Garrett Golding (@gjgolding) September 21, 2026
3) For refineries that can no longer export diesel, they will quickly fill local storage capacity and be forced to reduce their run rate – the amount of crude they refine and turn into products. This is a major problem because a barrel of crude is refined into multiple products.
— Garrett Golding (@gjgolding) September 21, 2026
5) The bottom line in this discussion is when you reduce run rates because you can’t export distillate/diesel, you end up reducing how much gasoline, jet fuel and other refined products you’re producing – which means higher prices.
— Garrett Golding (@gjgolding) September 21, 2026
7) From 2022: https://t.co/UvZhBVn77c
— Garrett Golding (@gjgolding) September 21, 2026
Another rendering of that argument:
Here’s how Trump’s proposed diesel export ban could backfire.
The ban forces international diesel demand to 0, and refiners run less crude. That crude is also used to make gasoline.
Even Energy Secretary Chris Wright admitted this could push gas prices up.… pic.twitter.com/RaShTps63M— Justin Wolfers (@JustinWolfers) September 24, 2026
The Common Dreams story below, from when the Trump idea first went live, has the same omission that Rory Johnson made, that the short-term relief in diesel prices would soon translate into higher gas prices.
Mind you, Trump for the moment seems to have backed off. But don’t count on this idea staying off the table with Trump desperately needing the boost short-term diesel price relief could provide.
By Stephen Prager, staff writer at Common Dreams. Originally published at Common Dreams
In an effort to blunt price hikes from his war with Iran, President Donald Trump is reportedly preparing a 90-day ban on diesel exports from the United States.
The cost of diesel—which is used to power semitrucks, trains, construction and farm equipment, and other large machines—has soared since Trump launched the war at the end of February, prompting Iran to restrict oil shipments through the critical Strait of Hormuz.
As of Wednesday, according to the American Automobile Association, average US diesel prices have jumped to $6.52 per gallon, a 77% increase from last year. Over the past month, as Trump has ramped up hostilities with Iran, prices have risen by 91 cents a gallon, a 16.2% increase.
Heightened diesel prices increase the cost of everything else—including food, transportation, and other energy sources. And while Trump claimed earlier this month to be bringing prices “way down, way, way down,” the latest federal data show consumer prices rising 0.4% in August—four times July’s monthly increase—and 3.4% over the past year.
With the midterms less than two months away and many voters blaming Trump for the strain on their pocketbooks, several GOP members of Congress, including some facing tough Senate races, such as Sen. Dan Sullivan (Alaska) and Rep. Ashley Hinson (Iowa), have cheered the idea.
Trump endorses a ban on diesel exports: “I’ve called for that too. I’ve said, let’s not send out the diesel.” (Trump has in fact called for other nations to buy energy from the US!) pic.twitter.com/GVYILw1ou4
— Aaron Rupar (@atrupar) September 22, 2026
During a press conference on Tuesday, Trump told reporters: “I’ve said let’s not send out the diesel. We make a lot of diesel. It could have a little bit of an effect on regular automobile gasoline because when you do that, you know, it’s a sort of a flow. It’s a balance. But no, I’ve called for it. I’ve called for it within my people. I’ve been talking about it.”
But while the plan may help to keep diesel prices down for long enough to help Republicans stop the bleeding before November, some economists are warning that it could make things much worse in the long term.
“The US Gulf Coast would get a temporary pump price dip, at the cost of likely higher coastal prices [elsewhere] and eventually, higher prices for everyone as investment gets scared away,” explained Bob McNally, president of Rapidan Energy Group and a former White House energy adviser under the administration of former President George W. Bush.
“You would get a short-term, abrupt collapse in pump prices” in some regions, McNally said, but “the US would shatter its reputation as a safe place to invest for a generation.”
Energy economist Philip Verleger said that a ban, even if temporary, “would have the same long-term effect as President [Richard] Nixon’s soybean embargo: the world would no longer view the United States as a dependable source.”
Speaking to Reuters, Verleger warned that in an already undersupplied market, removing US barrels could potentially double global prices.
But the short term seems to be all Trump and those around him pushing the ban are considering. An oil industry executive who discussed the proposed ban with White House officials told Politico that Trump viewed any fallout as “a December problem.”
He said that “cooler heads” in the White House have been “overpowered” by the “political camp” that has a “sky-is-falling, we-have-to-do-something concern about prices at the pump.”
Lorne Stockman, research director at Oil Change International, argued that there was a much simpler solution: ending the war that has caused oil prices to spike in the first place.
“The proposed diesel export ban is a short-sighted ‘America First’ response to a global crisis his reckless war helped create,” Stockman said. “The US exports about 5% of global diesel, and a ban risks turning a severe shortage into a global economic disaster.”
“It could send international prices soaring, drive up the cost of food, fertilizer, and essential goods, deepen hunger, and push already-struggling economies toward recession,” he continued. “At the same time, it would likely do nothing for people in the US, as refineries would cut production and gasoline prices would rise even further.”
He said, “Congress should use its constitutional powers to stop Trump’s war, tax the oil industry’s soaring windfall profits, and support farmers and other hard-hit sectors, and accelerate renewable energy and electrification, not hoard fuel and force the rest of the world to pay the price.”
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