White House backs away from diesel export ban proposal

The Trump administration has retreated from a proposed ban on diesel exports, a measure President Donald Trump initially floated to lower domestic fuel prices. The shift marks a departure from remarks made by Trump at the United Nations General Assembly in New York, where he stated he had urged aides to keep more diesel in the United States. Treasury Secretary Scott Bessent indicated the administration is evaluating the feasibility of a full or partial ban based on overall refining capacity, though the White House did not respond to requests for comment regarding the change in stance.

Diesel prices have become a significant political issue ahead of the November midterm elections, coinciding with the eighth month of the war in Iran and ongoing disruptions to global shipping routes. Federal energy data shows the national average for diesel reached $6.53 per gallon for the week of Sept. 21, 2026, a sharp increase from $3.75 per gallon during the comparable week a year prior.

Economists warn that while restricting exports might temporarily lower prices in certain regions, the policy could ultimately raise costs for consumers and businesses. Joe Brusuelas, principal and chief economist at RSM US LLP, noted that diesel is integral to transportation services, meaning higher fuel costs would likely translate into increased prices for groceries, household goods, and construction materials. Brusuelas estimated that if a ban were implemented, consumers could see price rises within four to six weeks as refiners adjust production and supplies tighten.

The current price surge is driven by multiple factors, including the Iran war disrupting the Strait of Hormuz, a key route for roughly 20% of the world's petroleum supply. Ukrainian strikes on Russian energy infrastructure have also limited refinery operations, while Houthi attacks in Yemen have restricted transport through the Bab al-Mandab Strait. According to Kpler, U.S. diesel exports hit a record 1.6 million barrels per day in August, up from approximately 1 million barrels per day in February. Domestic supplies remain nearly 13% below the seasonal average despite refineries operating at about 97% capacity.

Richard Stern, vice president of the Plymouth Institute for Free Enterprise, cited historical precedent against export bans, referencing the U.S. crude oil restrictions imposed in 1975. The institute's analysis indicates that following those restrictions, gas prices more than doubled over six years and rose 50% faster than overall inflation. Stern argued that a diesel export ban would not shield Americans from globally set prices but would instead force allies to seek fuel from Russia and China, potentially disrupting supply chains that support American industry.