Trump Backs Potential U.S. Diesel Export Ban to Curb Record Prices
U.S. President Donald Trump has expressed support for a potential ban on diesel exports, reportedly lasting 90 days, in an effort to lower domestic prices. While the move aims to provide short-term relief for American consumers facing record-high fuel costs, experts warn it could spike global prices by up to 100% and significantly impact Canadian producers and consumers.
U.S. President Donald Trump stated that he supports the idea of a potential ban on U.S. diesel exports as a measure to lower prices for Americans. The comments were made while Trump was meeting with Ukrainian President Volodymyr Zelensky at the UN General Assembly.
According to a report from Politico citing five people familiar with the discussions, such a ban could be implemented over a 90-day period. Treasury Secretary Scott Bessent confirmed that Washington is examining the feasibility of a full or partial ban regarding overall refining capacity.
The proposal comes amid record high diesel prices in the United States. Data from the American Automobile Association (AAA) indicates that average U.S. diesel prices have reached US$6.5107 per gallon. These surges are attributed to supply disruptions caused by Ukrainian strikes on Russia’s refineries and the U.S.-Iran war, which has disrupted trade routes like the Strait of Hormuz.
In August, the U.S. exported a record 1.6 million barrels per day of diesel, a significant increase from about one million barrels per day in February before the war began. Top buyers of U.S. diesel include Brazil, Chile, Mexico, Peru, Morocco, France, and the United Kingdom.
Energy economist Philip Verleger warned that while a ban might provide short-term relief in the U.S., it could raise world diesel prices by as much as 100 percent due to low price elasticity of demand. Experts also caution that such measures could destabilize refinery operations and deepen the global refining crisis.
For Canada, the implications are mixed. Richard Masson, former CEO of the Alberta Petroleum Marketing Commission, suggested that if the U.S. bans exports, countries will turn to Canada for supplies. This shift could initially create a domestic fuel glut but is expected to increase demand for Canadian exports, potentially benefiting producers while raising costs for Canadian consumers. As of publication, Canadian diesel prices are averaging over CA$2 per litre.