Trump plans 90-day ban on US diesel exports

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The Trump administration is preparing a plan to ban exports of diesel for 90 days, despite splits inside the administration and with the oil industry, in a bid to bring down energy prices weighing on Republicans leading into the midterms, five people familiar with the discussions said Wednesday.

A ban, the legal process of which is still being worked out, has created splits inside the administration and with the oil industry, which has warned that any short-term benefit would be outweighed by higher fuel prices in the future. Any halt to shipments would be the first restriction on U.S. energy exports since the Obama administration lifted a decades-old ban on oil exports in 2015.

But the war that the Trump administration launched against Iran in February, as well as Ukraine’s attacks against Russian refineries, have boosted diesel prices to record highs and caused farm-state Republicans to demand the ban. The average price for a gallon of diesel was $6.52 Wednesday, up 91 cents from a month ago and $2.83 from last year, according to AAA.

Some GOP lawmakers, refining industry executives and even some administration officials are still trying to convince President Donald Trump that a ban would be a bad idea, one that could backfire by eventually raising prices for gasoline, jet fuel and other fuels, said people familiar with the discussions who were granted anonymity to describe internal White House communications.

But as high energy prices continue to bedevil Republican candidates going into tough midterm elections in less than seven weeks, Trump is inclined to announce a ban by the end of the week and consider any blowback “a December problem,” said one oil industry executive who has discussed the ban with senior White House officials.

“What has overpowered cooler heads [in the White House] is the absolutely, sky-is-falling, we-have-to-do-something concern about prices at the pump” faction, said this person, who was granted anonymity to discuss conversations with White House officials. “That camp has been swept aside by the political camp, which says, ‘dammit, something has to happen.’”

White House and Energy Department spokespeople did not immediately address specific questions.

“This is another fake news news story from Politico,” a White House official said.

A 90-day ban could cause diesel prices to drop in some U.S. regions in the short term as tankers of the fuel originally intended to go to Europe or Asia are instead pumped back into the U.S. fuel system, raising domestic supply. But refiners would eventually slow down production in answer to the loss of a major export market, causing prices to rise.

Energy Secretary Chris Wright, Treasury Secretary Scott Bessent and Interior Secretary Doug Burgum have protested the idea of a total ban, people familiar with the internal discussions said.

“Bessent is a good soldier,” a person with knowledge of the discussions said. “He will voice opinions and then march forward.”

Spokespeople for the departments of Treasury and Interior did not immediately respond to questions.

Wright made a round of calls to energy CEOs on Tuesday night telling them a 90-day ban was likely to happen in the coming days, according to a Trump energy adviser, speaking on background to avoid repercussions. A number of CEOs immediately began calling the White House to push back on the ban, the adviser said, cautioning that “there’s a lot of swirl so it might change.”

“It’s a terrible idea,” the adviser said.

Another industry official said it could come down to the “last person in the room” with Trump when he makes the decision.

An external adviser to the administration said they had received “a bunch of frantic outreach” in recent days searching for alternatives to a ban. They worried the administration would repeatedly extend a ban and establish precedent for government intervention in energy markets — a playbook Democrats could use as well.

“It’s clear that there is a lot of internal opposition to it,” the person said.

Wright, speaking at an event in New York on Wednesday, came out against the idea.

“The blunt tool of banning diesel exports definitely doesn’t work because the U.S. exports a lot of diesel,” Wright said as part of a Climate Week panel discussion. “We’re the largest diesel exporter in the world, but that same refinery that produces diesel also produces gasoline and jet fuel. So, if you can’t export the diesel that comes out of our refineries when you run out of places to store it, and you have to reduce U.S. refining, which would put upward pressure on gasoline prices and jet fuel prices.”

At a separate event Wednesday morning, Wright suggested there would be a “voluntary” plan that would take a “slice” of diesel out of the global market.

While the idea of a ban had been floated off and on for months, a decisive moment came when Republican Sen. Chuck Grassley of Iowa came out in favor of the ban last weekend , according to the adviser. Grassley, one of the Senate’s top advocates for agriculture, wrote on X that high diesel prices were “KILLING FARMERS INCOME.”

Grassley’s message started a stampede of farm-country Republicans demanding the administration take action to lower diesel costs, even if it included a ban on exports.

Such a move would also come at a time when countries around the world have grown more dependent on U.S. diesel. The war that the U.S. and Israel launched against Iran in February has resulted in damaged Middle East refineries and less oil coming out of the region, while Ukraine has targeted Russian refineries to fend off Moscow’s invasion.

“A ban on diesel exports by the US would exacerbate the existing severe strains in the global diesel market and drive prices outside of the US even higher in the short term,” David Oxley, chief climate and commodities economist at Capital Economics, said in an analyst note.

“Nonetheless, given that a surplus of diesel in the US could paradoxically force American refiners to cut supplies of oil products – potentially within a few weeks – a ban would ultimately be self-defeating.”

James Bikales, Kelsey Brugger, Zack Colman, Charlie Cooper and Ben Storrow contributed to this report