Republican lawmakers and administration officials are debating a proposed ban on diesel exports as domestic prices reached a record high of $6.51 per gallon on Monday. Senators from agricultural states are advocating for the embargo to lower costs for farmers, while representatives from oil-producing states and industry groups argue the move would disrupt global markets and potentially increase prices.
The debate comes as fuel costs have risen sharply following conflict in the Middle East and Ukraine. According to AAA, the average price of diesel was $3.52 per gallon before U.S. and Israeli strikes against Iran, and $3.69 a gallon one year ago. The U.S. Energy Information Administration reports that distillate inventories, which include diesel, are currently 13% below the five-year average.
Sen. Chuck Grassley (R-IA) and Rep. Ashley Hinson (R-IA) have called for an embargo, citing the impact of high fuel and fertilizer costs on farm income. Senate Majority Leader John Thune (R-SD) said on Tuesday, September 22, that he is open to exploring a ban, though he noted that reopening the Strait of Hormuz would be a more effective long-term solution. In contrast, Sen. John Cornyn (R-TX) characterized the proposal as a "gimmick," and Louisiana Gov. Jeff Landry (R) suggested a 90-day temporary ban combined with permanent small refinery exceptions.
The scale of the issue involves 1.6 million barrels of diesel exported by the U.S. during the week of September 11, nearly double the 850,000 barrels exported during the same period last year. With diesel prices reaching $6.51 per gallon—a $2.99 increase from the pre-conflict average—the impact on a typical consumer or business is substantial. In Alaska, residents are already spending an average of more than $3,000 per capita annually on diesel and heating oil.
A ban would set a precedent not seen since the 1970s energy crisis, when the U.S. last maintained a long-term oil export embargo that was eventually lifted in 2015. Energy Secretary Chris Wright and industry analysts suggest that restricting exports could force U.S. refineries to reduce overall production, which might inadvertently lower the supply of gasoline and jet fuel, potentially increasing prices for all transportation fuels. The Trump administration has not yet announced a final decision, though Agriculture Secretary Brooke Rollins stated that potential actions could be announced "very soon." Midterm elections are scheduled to take place in approximately seven weeks.