Why Trump banning diesel exports would upset the U.S. oil sector and upend global fuel markets — ‘the cure would be far worse than the disease’

With U.S. diesel prices rising to an all-time high this week, President Donald Trump added support to the calls from farm-state Republicans to implement a temporary ban on diesel exports.

“I’ve said let’s not send out the diesel.

We make a lot of diesel.

I’ve called for it,” Trump said late Tuesday at the U.N.

General Assembly in New York.

On the surface, it makes sense.

Keep the diesel at home and prices will fall, sparing farmers, truckers, and inflationary pressures on all Americans.

But that’s not quite right.

Prices may go down some for about a month—timed with the midterm elections—but then the unintended consequences would quickly kick in.

What it would instead do is unwind much of the U.S. oil and refining industry, cause sky-high gasoline prices to soar further, and deplete the rest of the world of the U.S. diesel supplies they depend upon—a dependence that has only increased since the U.S. initiated the war in Iran and triggered the global energy crisis.

Banning exports might force diesel costs to go down a bit, but only in geographic pockets, such as the U.S.

Gulf Coast where most of the fuel is produced, analysts said.

Here’s how analysts say it would play out: If the U.S. energy sector is forced to keep its diesel at home, a domestic glut would quickly build, and storage would fill to the brim.

Refineries would then reduce their operations, not only cutting diesel output, but gasoline and jet fuel supplies as well because there aren’t individual switches for each fuel type.