White House Weighs 90-Day US Diesel Export Ban as Diesel Hits Record $6.53 a Gallon

The White House is preparing a potential 90-day ban on U.S. diesel exports ahead of November's midterm elections, Politico reported on Wednesday, citing five people familiar with the talks; the proposal remains under discussion and its legal framework is unresolved . A White House official called the report "another fake news story from Politico" . Any halt would be the first such export restriction since 2015, when the long-standing ban on oil exports was lifted . The move comes as diesel averages a record $6.53 a gallon nationally and $8.25 in California.

The administration is split. Energy Secretary Chris Wright said "the blunt tool of banning diesel exports definitely doesn't work" , and Politico's sources described a political camp overriding more cautious voices on pump prices . Wall Street has pushed back too: Barclays analyst Theresa Chen told clients a ban would be "detrimental to the US refining complex and unlikely to provide the intended price relief", and Goldman Sachs' Nikhil Bhandari said the global refining system will stay stretched through 2027 . The Financial Times argued a ban would hurt the U.S. and help China .

Markets moved immediately. U.S. diesel futures sank more than 7% to an intraday low while European diesel futures surged more than 7% . U.S. diesel cracks fell $12.70 to $97.85 a barrel, while gasoline cracks rose $2 to $47.41, reflecting concern that weaker diesel margins could push refiners to cut runs and tighten gasoline supply . Apollo chief economist Torsten Slok has warned record diesel prices could spark a core inflation shock .

What to watch: whether a formal order materializes and on what legal basis, how refiners with export exposure respond, and whether the gasoline and jet fuel squeeze critics warn about shows up in crack spreads. Mexico is the largest buyer of U.S. diesel, so any restriction would also land on cross-border trade .