President Trump said on Tuesday he supports banning U.S. diesel exports to help
lower prices and that the government will decide "soon" "one way or another."
Analysts warn the move could reduce, not raise, domestic supply and push prices
higher. Gbenga Ajilore, chief economist at the Center on Budget and Policy
Priorities, said an export ban "will not increase domestic supply; it could
reduce supply and drive prices up," and that ending the Iran war and reopening
the Strait of Hormuz would be the primary route to lower diesel prices. Bespoke
Investment Group said a ban could force Gulf Coast refineries to idle for lack
of storage capacity, cutting global diesel supply and hurting refiners' margins.
Ipek Ozkardeskaya, senior analyst at Swiss bank Julius Baer, noted the U.S. is
the world's largest diesel exporter and that export limits could sharply raise
global diesel prices while prompting U.S. refiners to cut output and tighten
other domestic fuel supplies.
