Oil leaders panic as US mulls limiting diesel exports

The White House and the fuel industry are getting along like oil and water after President Trump said this week that he’s considering a temporary export ban on US diesel—a rare move that risks roiling global markets, analysts widely believe.

The plan isn’t quite clear:

• After Trump expressed support for a ban on diesel exports on Tuesday, startled oil execs and lobbyists rushed to voice their opposition to Republican lawmakers and administration members, the Wall Street Journal reported.
• That night, Energy Secretary Chris Wright told industry CEOs that a 90-day ban was likely coming, according to Politico. The White House denied that report.
• Yesterday, Wright suggested that the administration would instead implement a partial “voluntary” export cap.

If diesel exports get restricted, Americans could see lower short-term diesel prices due to an initial domestic supply glut, but Goldman Sachs projected that a ban would ultimately reduce US fuel production and raise prices at the pump. US oil companies could also lose billions of dollars in overseas sales, and industry officials argue that even temporary limitations could push US import prices higher by spiking international transportation costs.

So, what’s the point of this? The Iran war has pushed fuel prices to record highs, the midterm elections are coming up, and recent NBC polling shows that voters are souring on the Trump administration’s economic handling. The GOP may be looking for “a politically popular ‘quick fix,’” according to Reuters’ energy columnist Ron Bousso.—ML