Trump considers option to ban diesel exports: Warning on gasoline prices

U.S. President Donald Trump announced that they are evaluating the option of banning diesel exports. Trump answered questions from members of the press following an announcement regarding South Korea's investments in U.S. energy projects at the White House.

When asked whether he had decided to ban diesel exports, Trump said he has been discussing the matter frequently with U.S. Secretary of Energy Chris Wright and Secretary of the Interior Doug Burgum. Trump conveyed that the two secretaries have assessed that while such a step could lower diesel prices, it might increase the prices of certain other products.

Arguing that oil prices will begin to fall, Trump said, "I think we are in a good spot because oil prices are going to start coming down. There is a massive amount of oil coming out of the Strait of Hormuz right now."

Stating that imposing a ban on diesel exports could have negative consequences for gasoline prices, Trump expressed that the problem in the diesel market is linked more to developments in Russia than in the Middle East. Trump said, "Because the diesel refineries there are being taken offline at a very alarming rate. If that hadn't happened, we wouldn't have a diesel problem. What is happening between Russia and Ukraine has really been the biggest problem in terms of diesel."

U.S. Secretary of Energy Chris Wright also stated that they have been working on the issue every day for weeks, if not months. Noting that a decline in diesel prices was observed last week, Wright said, "I think you will see prices drop significantly in the coming days and weeks, and we will have some announcements regarding this."

Wright said that there is a supply crunch due to the loss of diesel from Russia, and that there have also been some losses in diesel from Middle Eastern and Chinese sources. Stating that American refineries are producing at record levels, Wright expressed that announcements regarding new diesel supply coming to the market from Europe could drive prices down.

According to American Automobile Association (AAA) data, the average price of a gallon of diesel in the U.S. reached a record high of $6.53 on September 22. The average price was recorded at $6.41 as of September 30.