White House Weighs 90-Day Diesel Export Ban, Energy Sec Warns It ‘Definitely Doesn’t Work’

The White House is actively preparing a potential 90-day ban on diesel exports ahead of the November midterm elections, according to a Politico report Tuesday that cited five people familiar with the discussions. The proposal remains under discussion with its legal framework unresolved, the report said. A White House official dismissed the story as “another fake news story from Politico.”

The report triggered immediate and divergent reactions in fuel markets. U.S. diesel futures sank more than 7% to an intraday low, while European diesel futures surged over 7% to a session high. European diesel’s premium to Brent crude — a key crack spread — jumped to more than $95 a barrel, a record in Bloomberg data going back to 2011.

The plan has drawn sharp opposition from within the administration. U.S. Energy Secretary Chris Wright publicly rejected the idea on Wednesday. “The blunt tool of banning diesel exports definitely doesn’t work,” Wright said at an event in New York, as reported by Reuters. He argued that restricting exports would leave refiners with excess diesel inventories, forcing them to cut refinery output. Lower runs, he warned, would tighten supplies of other fuels, ultimately driving up costs for consumers and businesses.

Wright’s stance puts him at odds with President Donald Trump, who signaled support for the idea Tuesday amid record-high diesel prices in the U.S. and Europe. Treasury Secretary Scott Bessent has been assigned to examine “if it’s feasible,” according to the report.

Industry groups and Wall Street analysts echoed Wright’s warnings. The American Petroleum Institute cautioned that removing U.S. diesel from the market “could instead result in reduced refinery runs, global economic damage and even higher U.S. prices.” Of the roughly 8 million barrels of diesel traded globally by sea each day, the U.S. supplies about 1.5 million — some 20% of the total, making it the single largest source.

Barclays refining and midstream analyst Theresa Chen told clients last week that a proposed export ban would be “detrimental to the U.S. refining complex and unlikely to provide the intended price relief.” She pointed out that keeping diesel inside the country does not guarantee it can reach gas pumps.

Goldman Sachs energy analyst Nikhil Bhandari told clients Tuesday that the global refining system will be stretched through 2027, with diesel and gas prices expected to remain elevated.

The U.S. has become Europe’s main overseas supplier, with American exports of the fuel surging to a weekly record of nearly 2 million barrels a day last month, according to the report. Latest EIA data for 2025 shows Mexico as the largest buyer of U.S. diesel at roughly 220,000 barrels per day or 17% of total distillate exports, though that volume is down about 18% from 2024. Chile is the second-largest destination with volumes up 15,000–16,000 b/d from 2024. Brazil imports about 103,000 b/d — well below its earlier peaks of near 200,000 b/d as Brazil has taken more discounted Russian barrels since 2022 sanctions redirected Russian diesel away from Europe. The Netherlands, a major European trading hub, imports about 98,000 b/d, and the United Kingdom imports about 89,000 b/d, a record annual average.

The supply threat comes at a time when Europe is already grappling with the loss of Middle East diesel shipments and Russian export curbs. A key U.S. oil industry group warned the move could damage the global economy. “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,” an unnamed person familiar with the talks told Politico. “That camp has been swept aside by the political camp, which says, ‘dammit, something has to happen.’”

Apollo chief economist Torsten Slok had earlier warned that the refining crisis could spark a core inflation shock, underscoring the stakes of the policy debate.

Bloomberg, in separate summaries of the issue, also noted that withholding shipments could result in global economic damage — and potentially even higher prices in America.

The immediate market reaction on Wednesday saw U.S. diesel futures drop more than 7% while European diesel futures surged, reflecting the asymmetric risk of an export ban for the two regions. As Bloomberg macro strategist Michael Ball wrote, the White House may be able to engineer a brief drop in U.S. diesel prices by limiting exports, but it risks creating a bigger supply problem down the road, with distillate stocks at seasonally record lows.