Trump Backs Diesel Export Ban as Oil Industry Sounds Alarm

President Donald Trump said Tuesday that he has pushed within his administration for a ban on United States diesel exports as record fuel prices squeeze farmers and truckers before November’s midterm elections. Treasury Secretary Scott Bessent said officials are evaluating whether a full or partial ban would be practical.

“I've said let's not send out the diesel. We make a lot of diesel,” Trump told reporters on the sidelines of the United Nations General Assembly in New York, according to CNBC. Asked when a decision might come, Trump answered, “fast, one way or another.”

Bessent said the administration is examining “whether it's feasible in terms of the overall refining capacity, and whether a full or a partial ban would work.” The review places refinery operations and fuel supply at the center of the policy debate.

AAA data showed that United States diesel prices averaged a record $6.53 a gallon on Tuesday. That figure was roughly $3 higher than at the same point a year earlier, while the California average reached $8.44 a gallon.

Fuel costs have climbed as Ukrainian attacks on Russian refineries and the war between the United States and Iran have disrupted global refining capacity. Trade routes, including the Strait of Hormuz, have also been affected.

The American Petroleum Institute warned that restricting exports could deepen the strain rather than relieve it. The industry group argued that refiners need the ability to move diesel into global markets while balancing their output of other fuels.

“Restricting U.S. energy exports would only compound the problem — exacerbating refining challenges and ultimately hurting consumers,” API President and CEO Mike Sommers said in a statement. “The answer is more supply and more flexibility — not new restrictions that risk making a difficult situation worse.”

The API said the United States supplies roughly 20% of the approximately 8 million barrels of diesel traded globally by sea each day. That share makes United States exports a significant component of the seaborne diesel market described by the group.

Gulf Coast refineries produce more diesel than the surrounding region can absorb, according to the API. The group said an export ban would cause inventories to build, potentially forcing refiners to reduce crude throughput and cutting production of gasoline and jet fuel at the same time.

Energy economist Philip Verleger warned that a ban could drive global diesel prices up by as much as 100%, according to Reuters. Such an increase would sharply amplify the international consequences of removing United States diesel supplies from global trade.

S&P Global estimated that a ban could leave United States refineries with a substantial glut, The Wall Street Journal reported. That excess could compel refiners to cut output by close to two million barrels per day, equivalent to about 12% of total refinery runs.

The oil industry was blindsided when Trump expressed support for the restriction, according to The Wall Street Journal. Executives and lobbyists quickly contacted the president’s lieutenants and congressional Republicans, while industry insiders told the outlet that a ban appeared inevitable.

“It doesn't matter. We're not debating policy anymore,” an energy consultant with ties to United States refiners told The Wall Street Journal. The comment reflected the industry’s abrupt shift from debating the proposal to preparing for the possibility that it would advance.

Republican support for action has been building. Iowa Sen. Chuck Grassley called for an embargo over the weekend, saying elevated diesel prices were devastating farmers, while Senate Majority Leader John Thune said last week that he was “open” to examining a ban.

Resistance has also emerged within the Republican Party. Sen. Lisa Murkowski described the proposal as a “short-term” benefit that does not “really move the needle,” while Sen. John Cornyn called it “a gimmick,” according to Axios.

The administration’s feasibility review now must weigh record domestic prices against warnings about refinery congestion and global supply. Trump has promised a rapid decision, while the petroleum industry argues that restricting exports could reduce refinery throughput and tighten supplies of several fuels.