US diesel prices hit a new high! Trump backs export ban, analysts warn of fear of eating up gasoline supply

The Zhitong Finance App learned that at a time when the average price of diesel in the US continues to rise to a record high of 6.53 US dollars per gallon, US President Trump said on Tuesday that he is encouraging his staff to support a ban on US diesel exports. When asked about the rising demand from Republican lawmakers to suspend diesel exports, Trump said, “I've already said, 'Let's not send out diesel. ' I'm already calling for this from within myself. I've been talking about this all the time.”

Trump made this statement during a meeting with Ukrainian President Zelensky during the UN General Assembly. He previously urged Zelensky to stop attacks on Russian refineries — attacks that have prompted Russia to restrict its own diesel exports. The ban on Russian diesel exports will last at least until September 30, as the Russian government tries to ensure domestic market supply during the Ukrainian attack. Before Ukraine launched an unprecedented round of attacks, Russia was a major diesel exporter, accounting for about 10% of the world's total supply.

Meanwhile, the continued pressure on supply due to the conflict in the Middle East also contributed to a sharp rise in diesel prices during the year. In the Middle East, the ongoing confrontation between the US and Iran has limited energy exports through the Strait of Hormuz — the waterway was responsible for one-fifth of the world's oil and liquefied natural gas shipments during peacetime, while also transporting large quantities of petroleum products. The recent escalation of clashes between Saudi Arabia and Yemen's Houthis has also disrupted Red Sea shipping. In addition, oil refineries in the Middle East have also been attacked, which may further increase the extent of restrictions on the supply of refined oil products in the Persian Gulf region.

Diesel fuels trucks, trains, ships, and heavy equipment, and also drives agricultural machinery, power generation, and home heating. And rising demand for heating and agriculture in the fall could further amplify the impact. As consumers are more sensitive to retail gasoline prices, the rise in diesel is often overlooked, but its impact is transmitted through layers of food, transportation, construction, and commodity prices.

Bob McNally, president of Rapidan Energy, said that diesel is “a more hidden, more expensive, and more influential fuel” and is the true lifeblood of the economy. GasBuddy analyst Patrick De Haan warned that “every truck, every delivery, every package, and every purchase is getting more expensive.” Patrick De Haan said that Americans now spend about $700 million more on gasoline and diesel every day than a year ago. Record diesel prices will affect every shipment, every shipment, and may reignite inflation throughout the supply chain. He also said that diesel prices are at current levels and will become the “silent killer” of the economy.

Trump's strong ban on diesel exports aims to lower US diesel prices before the midterm elections to ease voters' concerns about rising cost of living. As the midterm elections approach, record diesel prices may weaken support for Trump's Republican Party in agricultural states such as Iowa, and may also affect states that rely on household heating oil, such as Maine.

Regarding the high price of diesel, Trump previously stated that this was not due to the war he launched against Iran at the end of February. Trump posted on social media: “The rise in global diesel prices was mainly caused by the Russian-Ukrainian war, not the war with Iran.”

However, data compiled by the media and estimates cross-checked with diesel traders show that the supply of diesel removed from the market during the US-Iran war exceeded the supply loss caused by the Russian-Ukrainian conflict. According to estimates by energy analysis companies Energy Aspects, Kpler, and Vortexa, diesel supply in the Middle East decreased by an average of about 770,000 barrels per day from March to August this year compared with the same period in 2025. This figure is more than double the loss of Russian diesel supply of about 350,000 b/d during the same period.

It should be pointed out that the impact of the Russian-Ukrainian conflict on diesel supply has expanded in recent months as Ukraine has launched a series of attacks on Russian refineries. In July and August, when Russia imposed a ban on diesel exports, diesel exports fell by 615,000 barrels per day compared to the same period in 2025. This figure is almost equal to the loss of diesel supply in the Middle East. Crucially, Russian supply losses occurred months after the war in Iran began. Global fuel and crude oil inventories have continued to decline during this period, leaving the market with little buffer space to absorb this shock.

At the same time, against the backdrop of the closure of refineries in the US over the years and the tightening of global fuel supply due to the Middle East war, US refiners are fully operating to meet market demand, making the second quarter one of the most profitable quarters in history. America's six largest refiners — Marathon Crude Oil (MPC.US), Valero Energy (VLO.US), ExxonMobil (XOM.US), Phillips 66 (PSX.US), Chevron (CVX.US), and PBF Energy (PBF.US) — made a combined profit of $24.7 billion in fuel production in the second quarter.

Although the US is one of the world's largest refiners, has a huge network of refineries, and can process millions of barrels of crude oil every day, the price of refined oil products is still high. American refiners are operating almost at full speed. As of July, the operating rate of US refineries was close to or above 95% for nearly two months, which raised the risk of equipment failure and maintenance delays, and could exacerbate an already tight supply situation.

The ban on diesel exports is likely to backfire

Although in theory, the ban on diesel exports may temporarily depress oil prices in parts of the US, it will further tighten supply in Europe, which already has structural shortages and is heavily dependent on US exports. In the Middle East war, the US became the world's “last supplier”, and diesel exports soared to a weekly record level of close to 2 million b/d last month. Once suspended, European and Latin American buyers will be forced to search for alternative sources at a time when they have little choice, and may increase already severe inflationary pressure.

US Treasury Secretary Bessent said that the US “is examining whether it is feasible in terms of overall refining capacity, and whether a complete or partial ban will work.” However, US Secretary of Energy Wright and Secretary of the Interior Bergum both opposed the export ban. Among them, Wright emphasized that the US is seeking to increase supply rather than cut foreign sales. Wright said last week that the ban will cause an oversupply of diesel along the US Gulf Coast and force US refiners to reduce operating rates, which in turn will lead to a decline in gasoline production.

Many analysts also believe that the ban on diesel exports may be counterproductive because US domestic refiners may reduce crude oil processing due to loss of overseas customers, which means they will also reduce production of gasoline and aviation fuel, thereby driving up the price of such refined oil products. Another complicating factor is that some parts of the US (such as the Northeast) import diesel. If the US imposes a ban on diesel exports, global diesel prices will rise, and these regions will eventually pay higher prices.

The US imposed a 40-year ban on crude oil exports after the 1975 Arab oil embargo — a time when the US refining industry relied heavily on foreign crude oil. The US Congress lifted the ban in 2015. Since lifting the export ban under a state of emergency is more difficult politically than implementing it, the oil industry does not want to see the ban reintroduced.