Big business warns Trump against diesel export ban in joint letter

• Business groups stated an export ban would 'lead to less fuel production, tighter supplies and rising costs for American families, farmers and truckers'
• Treasury Secretary Bessent said the White House was examining whether a full or partial 90-day ban is 'feasible in terms of overall refining capacity'
• Energy experts warn a ban would cause brief price drops followed by long-term supply constraints, and would remove the world's largest diesel export source amid already tight global markets due to Russian and Middle East supply disruptions

Summary

Major U.S. business organizations are urging President Trump to reject a proposed diesel export ban, warning it would backfire and increase fuel prices. The U.S. Chamber of Commerce, Business Roundtable, National Association of Manufacturers, and American Petroleum Institute sent a joint letter Wednesday stating such action would result in "less fuel production, tighter supplies and rising costs for American families, farmers and truckers."

Key Context:

• Diesel prices hit $6.51 per gallon nationally on Thursday, up $2.82 year-over-year
• Trump faces political pressure from Republican lawmakers in farm states like Iowa ahead of midterm elections
• The President confirmed Tuesday he has advocated for an export ban internally, surprising markets and industry groups

Administration Response:

Treasury Secretary Scott Bessent indicated the White House is examining whether a full or partial ban is "feasible" regarding refining capacity. However, Energy Secretary Chris Wright, an oil industry veteran, denied plans for a "full blanket ban," stating discussions focus on efficiently increasing domestic diesel supply.

Market Impact:

Reports of a potential 90-day export ban drove down diesel futures and refining stocks Wednesday. Energy experts warn a ban would cause brief regional price drops but ultimately trigger higher costs as refiners reduce production.

Global Supply Dynamics:

The U.S. is the world's largest diesel exporter. Global supply is already constrained due to Ukraine's attacks on Russian refineries (Russia was previously the second-largest exporter) and Middle East conflicts affecting exports through the Strait of Hormuz. A U.S. ban could significantly disrupt global diesel markets.

Industry consensus suggests the proposed policy would achieve the opposite of its intended effect.