Even without a formal diesel export ban, the growing discussion around the measure appears to have achieved one immediate objective: pushing diesel prices lower, at least in the futures market.
Ultra low sulfur diesel (ULSD) on the CME commodity exchange dropped 16.57 cents per gallon on Wednesday, a 3.35% decline, settling at $4.7764/g. That was the lowest settlement since September 8, a relatively recent date that highlights just how sharply prices had climbed during the month. ULSD futures had reached an all-time high settlement of $5.2465/g on September 23.
The decline in diesel, however, came with an important consequence elsewhere in the fuel market.
RBOB, the intermediate product used as the pricing benchmark for gasoline in futures trading, jumped 9.95 cents per gallon to $3.587/g. That represented a 2.85% increase and marked its highest settlement since July 23. Before that, the last time RBOB had settled at similar levels was during a series of settlements above $3.60/g in the first half of May.
That market reaction is at the center of the criticism surrounding a possible diesel export ban. Numerous opponents of the proposal have warned that reducing diesel exports could simply move the pricing pressure into other refined fuels.
The Wall Street Journal, for example, published an editorial attacking the possibility of an export ban under the headline “Republicans are Running on Empty.”
Wednesday’s market moves came one day after President Trump signaled his support for a potential ban, with several Republican lawmakers also backing the idea.
U.S. ULSD exports for the week ending September 18 stood at 1.33 million barrels per day, well below the levels recorded in many recent weeks, when exports were generally between 1.6 million and 1.7 million b/d.
At the same time, U.S. consumption of non-jet fuel distillates, roughly 90% of which is ULSD, has been running at approximately 3.6 million to 3.8 million b/d. Those export volumes remain above recent norms.
A report from S&P Global Energy outlined the potential consequences of an export ban without yet incorporating Wednesday’s market reaction, which closely mirrored the report’s assessment.
According to S&P Global Energy, any diesel surplus created inside the United States by an export ban “would create significant operational and financial pressure for imports, shifting yield away from diesel.”
Refiners could cut crude runs by 2 million b/d
The expected response from refiners would be substantial.
S&P Global Energy said refiners could reduce crude runs by roughly 2 million b/d in order “to eliminate the resulting diesel surplus.”
Since the beginning of June, U.S. ULSD production has averaged just below 5 million b/d. That is around 150,000 b/d higher than during the corresponding period a year earlier. Achieving that production level, however, has required U.S. refiners to operate at approximately 97% of capacity.
A reduction in refinery runs of the magnitude described by S&P Global Energy would inevitably affect the supply of other fuels.
“A run cut of this magnitude would inevitably lower the supply of gasoline and jet fuel, raising prices of these fuels,” the report said.
That is effectively what futures markets signaled on Wednesday, with diesel prices falling while gasoline futures moved sharply higher.
S&P Global Energy also warned that even a 3% shift in refinery yield from diesel toward gasoline would not necessarily eliminate the pressure.
“Even with a 3% shift in yield from diesel to gasoline, the drop in gasoline production would cause the U.S. to become a net importer of gasoline in the fourth quarter of 2026,” the report said.
As a result, regions on the East and West Coasts that depend on imports could become particularly exposed to price shocks caused by more expensive imported fuel.
White House position remains unclear as restrictions are discussed
Late Wednesday, the White House position on a complete diesel export ban remained uncertain, although several reports suggested that some form of restriction could be moving closer to consideration.
Energy Secretary Chris Wright was quoted by Politico as saying during a New York energy forum held as part of Climate Week that he opposed a ban.
According to Politico, Wright argued that a blanket prohibition would be ineffective because the United States exports large quantities of diesel. He noted that the country is the world’s largest diesel exporter and emphasized that the same refinery producing diesel also produces gasoline and jet fuel.
Wright explained that if refiners were unable to export diesel once domestic storage capacity became constrained, they would have to reduce U.S. refining activity. That, in turn, would put upward pressure on gasoline and jet fuel prices.
At the same time, Politico reported that support is growing within the administration for taking some form of action to provide relief to sectors of the economy particularly affected by elevated diesel prices, including trucking and agriculture.
One measure reportedly under consideration is a 90-day ban on diesel exports.
Bloomberg separately reported that Wright had warned oil industry leaders to prepare for possible U.S. restrictions on diesel exports as debate intensified inside the Trump administration.
According to the report, Wright delivered that message to company executives during calls late Tuesday. The conversations took place just hours after President Donald Trump said he had encouraged administration officials to examine possible restrictions on diesel exports.
The policy debate therefore remains unsettled, but the market response has already highlighted the central issue: lowering diesel prices through export restrictions could come with a corresponding increase in gasoline and jet fuel costs, particularly if refiners respond by cutting crude runs.
