Trump’s Diesel Export Ban Could Raise U.S. Gas Prices, Experts Warn

President Donald Trump is considering a ban on US diesel exports as he seeks to curb rapidly rising fuel prices.

Diesel prices reached record highs this week, alarming Republican congressional candidates just weeks before the crucial midterm elections. Because diesel powers major parts of the economy, from freight and farming to construction, the increase is also adding to inflation pressures.

Speaking in New York while attending the United Nations General Assembly on Tuesday, Trump said he had already advocated restricting exports. ‘Well, I’ve called for that, too,’ he said. ‘I’ve said, “Let’s not send out the diesel.” We make a lot of diesel.’

The national average price for diesel reached a record $6.53 a gallon this week, according to AAA. That compares with $3.69 a gallon at the same point last year.

Senior administration officials have indicated that the White House may favor a less sweeping response than an outright ban. Energy Secretary Chris Wright told the WSJ Journal House that voluntary limits could help balance domestic demand with the needs of overseas markets.

Treasury Secretary Scott Bessent said during a United Nations bilateral meeting between Trump and Ukrainian President Volodymyr Zelenskyy that officials were assessing whether a full or partial suspension of overseas shipments would accomplish the administration’s objectives.

But energy experts and industry leaders warn that an export ban could ultimately backfire, driving up gasoline prices as well as diesel costs over the longer term.

Mike Sommers, chief executive of the American Petroleum Institute, rejected the proposal, noting that ‘restricting US energy exports would only compound the problem – exacerbating refining challenges and ultimately hurting consumers.’

Trump himself has acknowledged that intervening in international fuel markets could produce unintended consequences for drivers, conceding that the policy might have ‘a little bit of effect’ on fuel costs for motorists.

Global supply chains have been disrupted by the escalating conflict in the Middle East, while Ukraine’s attacks on Russian refineries have added to pressure on fuel markets.

At the same time, US stockpiles of commercial diesel have fallen by double digits since the Iran war began.

US refineries have increased diesel shipments overseas to help address shortages abroad, with government data showing foreign deliveries up by more than 30 percent.

Wright, a former corporate energy executive, has specifically warned that stopping those exports could create immediate problems.

At an industry event hosted by the Economist this week, he said disrupting current trade flows would lead to ‘more expensive gasoline right away,’ placing additional pressure on everyday commuters.

Experts predict that banning diesel exports would send average US gasoline costs up by another $0.30. Patrick De Haan, head of petroleum analysis at GasBuddy, predicted that if a diesel ban comes into effect, regular gas prices might shatter previous records.

AAA data put the average US gasoline price just below $4.50 a gallon this week. An additional 30 cents would lift it to $5.20, nearly 19 cents above the previous record of $5.02 set in June 2022 during pandemic-related shortages.

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Some traders say keeping more diesel in the domestic market could briefly lower prices. Drew Rathgeber, a commodities specialist, described the likely initial market response if refiners were left with unsold inventory.

‘If refiners lose their export customers for diesel, the extra fuel does pile up here for a while, but then refiners respond by running less crude,’ Rathgeber told the Daily Mail.

This reduction in overall crude oil processing is exactly why a diesel ban would drive up gasoline prices. ‘When they cut back, they make less gasoline too, and that can push pump prices up,’ Rathgeber told us.

Geography also plays a massive role in why a nationwide embargo would fail to help many struggling Americans. 

The Eastern Seaboard relies heavily on foreign imports because domestic pipelines from southern states are notoriously inadequate.

Therefore, a massive surplus of fuel sitting in Texas storage tanks does virtually nothing to lower costs for drivers in New York or Boston. Transporting that excess product up the coast by ship remains incredibly expensive and logistically challenging.

Furthermore, removing American energy from the global equation will inevitably trigger a worldwide bidding war. As international prices surge, the raw crude oil that US companies must purchase will also become significantly more expensive.

Nations that currently depend on American refineries will be forced into a desperate scramble to keep their own economies running. Supply chain experts are already mapping out the catastrophic ripple effects of this geopolitical shift.

‘They would have to find fuel elsewhere, potentially bidding up prices in other markets. That could feed back into the US market rather than insulating it from higher prices,’ cautioned Jennifer Lockett, a freight operations expert.

Ultimately, any relief experienced in a specific US region would be incredibly short-lived. Within weeks, the broader economic fallout would erase any temporary savings at the pump for domestic drivers.

Vince Stanzione, CEO and founder of First Information, noted that while President Trump may threaten a diesel ban, Energy Secretary Chris Wright, an energy veteran with decades of experience, would be deeply involved in the decision.

‘Trump will take counsel from Wright after all, he appointed him to be a steady energy hand,’ Stanzione told the Daily Mail.

Stanzione told us that what the US needs is more refining capacity, not a diesel ban. The last new US refinery was opened in 1977.

Experts agree that political gimmicks will not solve the fundamental infrastructure problems plaguing the American energy sector. The root cause of the current bottleneck is a severe lack of modern facilities to process raw crude.