/Feature
No, the US Should Not Ban Diesel Exports
Six-dollar diesel, which helped hand Democrats a midterm victory, drove the White House to consider a 90-day ban on exports. The ban would buy a season of cheaper fuel but drive off the investment that keeps America’s refineries and wells running.
The diesel crisis
Diesel is near an all-time high. After eight months of conflict around the Strait of Hormuz, a drone attack on a Saudi pipeline, and escalating Ukrainian strikes on Russian refineries, the US national average sits at $6.35 a gallon, up more than 70 percent from $3.72 a year ago.1 Most Americans never buy diesel directly, but it powers the economy they live in, from buses and trucks to tractors and excavators. When diesel is expensive, the cost of doing business rises and inflation follows across most of the economy.
Americans, frustrated by $6 diesel and the rising cost of living, have largely blamed Donald Trump and the war in Iran.2 On November 3 they said so at the ballot box, handing Democrats clear majorities in the House and Senate in what is being called a “blue tsunami,” including wins in races that had looked unwinnable.3 Registered voters named the economy as the most important issue, with the cost of gas and energy being a leading complaint.4 Democratic Senate candidates even won on it in deeply conservative states like South Carolina, Texas, and Kansas.
To stop the political bleeding, the Trump administration has considered several interventions to lower gasoline and diesel prices. Among them, a proposed 90-day ban on diesel exports gained traction in September.5 Asked about it during a late-September meeting with Ukrainian President Volodymyr Zelensky, Trump said, “I’ve called for that, too. I’ve said, ‘Let’s not send out the diesel.’ We make a lot of diesel … I’ve called for it within my people.”6 By October 2 he had reversed himself: “Europe has a lot of diesel, and they’re going to be making a major world contribution, and so are we. And we’re not going to be doing the export ban.”7
Trump is not the first president to consider it. In 2022, when Russia’s invasion of Ukraine sent gasoline prices soaring, the Biden administration weighed a similar policy.8 The idea will return the next time fuel gets expensive, so it is worth understanding why it tempts and why it fails. An export ban could lower domestic prices in the short term, but it does nothing to address the heightened global conflict that is making diesel so expensive in the first place. To lower diesel prices for good, the United States needs to engage in a mix of industrial policy and diplomacy to stabilize the international supply of diesel. A ban, meanwhile, would tell every company weighing a refinery or a well in the United States that the rules can change the moment the business turns profitable. The relief would end with the ban, but the fallout, including damaged investment in US refining and production, would outlast it.
The petroleum industry is critical to the US economy. Oil products are one of America’s largest export categories, and the industry, including extraction and refining, directly employs more than half a million people.9 Those workers are disproportionately young men without college degrees, and they earn well above the national median wage. Beyond direct employment, the oil industry creates millions of indirect jobs at suppliers, the companies that provide it with equipment, parts, and services. The Economic Policy Institute estimates that every job in the oil industry supports between 3.7 and 9.4 jobs at suppliers.10 The loss of the domestic oil industry would threaten millions of these high-paying blue-collar jobs.
“A ban, meanwhile, would tell every company weighing a refinery or a well in the United States that the rules can change the moment the business turns profitable. The relief would end with the ban, but the fallout, including damaged investment in US refining and production, would outlast it.”
What would a diesel export ban look like?
Banning diesel exports would be a radical intervention in both global and domestic markets. The US is the world’s largest diesel exporter, shipping out around 1.5 million barrels a day.11 An export ban would immediately flood the domestic market and send prices crashing. At the same time, the disappearance of US diesel from the global system would push international prices much higher.
While lower domestic diesel prices would be an economic boon, achieving them with an export ban could lead to unintended consequences. For starters, if diesel becomes more expensive in other countries, it could drive up the price of various imported goods. The American economy is mighty, but it can’t produce everything. Bananas, coffee, and natural rubber don’t grow here; textiles and low-cost electronics could be made here, but not economically. As long as we import, our costs are tied to our suppliers’ costs. If they pay more for diesel, we pay more for their goods.
Banning diesel exports could also, paradoxically, make gasoline more expensive. Refineries are designed to convert crude oil into multiple valuable products such as gasoline, diesel, and jet fuel. From a standard 42-gallon barrel of crude, US refineries get roughly 19 gallons of gasoline, 13 gallons of distillate (mostly diesel), and 5 gallons of jet fuel.12 Each product covers part of the refinery’s costs. If diesel exports are banned and diesel prices fall, gasoline and jet fuel have to carry the share diesel used to pay for. Right now refineries are running near full capacity and deferring maintenance to cash in on high diesel prices. Ban exports and some of them will shut down for that maintenance.13 Fewer operating refineries means less gasoline, and less gasoline means higher prices.
Whether a ban lowers prices also depends on where you live. Oil products travel easily by tanker, so their markets are global. The United States is a net exporter of diesel, but it both exports and imports a great deal: Gulf Coast refineries ship fuel to Latin America and Europe, while California, Hawaii, and Alaska import diesel from Asia. That is the cheapest arrangement available. Under a ban, Asian diesel would get expensive along with everyone else’s, and Gulf Coast diesel would have to reach the West Coast through the Panama Canal.14 Doing that affordably would mean waiving the Jones Act, the 1920 law that requires cargo moving between US ports to travel on ships built, flagged, owned, and crewed in the United States. Waivers happen; the administration has already waived it during the Iran war.15 Even so, a ban would likely lower prices in regions that refine more diesel than they use and raise them in regions that depend on imports.
For consumers, these side effects would be modest next to the savings on diesel. While this policy may benefit American consumers in the short term, the same cannot be said of the oil production and refining industries, where it could have a chilling effect.
Argentina is the case study for export bans
Argentina has struggled with high inflation for sixty years. President Néstor Kirchner took office in 2003 after a particularly brutal bout; inflation fell early in his term and began creeping back in 2005.16 In Argentina, as in the United States, voters care deeply about the price of groceries. Expensive eggs helped send Donald Trump to the White House in 2024, and expensive meat made Democrats competitive in the 2026 Mississippi Senate race. Argentina has one of the world’s highest rates of per capita beef consumption, with the average Argentine eating more than 100 pounds a year.17 Kirchner’s government reasoned that an export ban would keep prices down by preventing foreign buyers from outbidding domestic consumers. So in November of 2005, it raised the export tariff on beef from 5 to 15 percent and in March of 2006, it went a step further and banned beef exports for 180 days.18
Within a few months the ban was loosened: exports were allowed up to 40 percent of 2005 volumes,19 and later in the year 70 percent.20 The measures did suppress beef prices, by as much as 30 percent in the month after the ban.21 They did little for inflation itself, which was driven by loose monetary policy; the central bank was holding real interest rates below zero.22
Kirchner failed to curb inflation, but he did succeed in crippling the beef trade. In 2005 Argentina exported about 700,000 tons of beef, worth $1.4 billion. By 2015 exports had fallen below 200,000 tons, and Argentina had dropped from the world’s third-largest beef exporter to its eleventh.23 Producers could no longer count on access to export markets, so they stopped investing in their herds. Without enough cattle, slaughterhouses began closing for days at a time.24
Beef is not a profitable business. Over the past thirty years US cattle operations have earned gross margins of about 13 percent, according to the USDA’s Economic Research Service, and once unpaid family labor, equipment costs, and the opportunity cost of land are accounted for, total returns were negative every single year.25 Argentina produces beef more cheaply than the United States, but Argentine ranching is still a low-margin business with frequent downturns. In 2005 and early 2006 Argentine ranchers were finally earning strong profits from exports. The crackdown told them that in a good year the government would take it away to help consumers. Many concluded they were better off out of the business, and as many as 30,000 producers left the industry over the following years.26
The export ban forced Argentina’s beef industry to sell below the global market rate. The government then discovered that the beef industry needed to adhere to market rates to maintain production.
“Kirchner failed to curb inflation, but he did succeed in crippling the beef trade. In 2005 Argentina exported about 700,000 tons of beef, worth $1.4 billion. By 2015 exports had fallen below 200,000 tons, and Argentina had dropped from the world’s third-largest beef exporter to its eleventh.”
Export restrictions only work where there is rent to extract
In economics, a rent is what a producer receives for a product beyond what it cost to make. David Ricardo, an influential classical economist, provided an early formulation of this idea by imagining a small isolated nation with some fertile land and some less fertile marginal land. To feed the population, farmers first grow corn on the fertile land, but if more corn is needed, they begin growing corn on the marginal land as well. Let’s say it costs $3 to produce a bushel of corn on fertile land and $5 to produce a bushel of corn on marginal land. One bushel of corn is indistinguishable from any other, so the price of corn will be set by the cost of producing corn on marginal land. Whoever owns the fertile land gets $2 per bushel of rent since they are selling an identical product with $2 lower production costs than the marginal farmers. If the government demanded that a farmer on marginal land sell corn at a $1 discount, he would go out of business. But if the government demanded a $1 discount from a farmer on fertile land, it would have no effect on output. The government would simply be extracting a portion of the rent.
The Argentine government assumed its beef industry had plenty of rent when it restricted exports. If the government had been right, the price of beef would have fallen, but the industry would have remained just as large. That it contracted as sharply as it did shows the rents were too thin to absorb the lost revenue.
Rents also exist in the energy industry. Just as a farmer on fertile land gets rent from the fact that he can produce a bushel of corn more cheaply than a farmer on marginal land, an oil company on a good reservoir gets rent from the fact that it can produce a barrel of oil more cheaply than a company on a marginal reservoir. Though Ricardo developed his theory of rents while thinking about agriculture, rents in the energy industry are much larger than in agriculture. Extracting oil from a good reservoir costs a fraction of extracting oil from a marginal one, so whoever has access to the good reservoirs earns outsized profits. Countries that sit on top of good oil reserves understand this dynamic and have developed various methods of extracting rents from oil producers.
Export bans are one way to extract rent. Cutting off foreign buyers lowers domestic prices; if producers were earning a rent, the ban shrinks it and passes the difference to consumers. Bans are rare because they are so distortionary, but they happen. Indonesia, which has rich deposits of thermal coal, banned coal exports for a few weeks in 2022 to rebuild domestic stockpiles. Russia, until recently the world’s second-largest diesel exporter, banned exports of diesel and other refined products in 2026 after Ukrainian strikes reportedly knocked out half its refining capacity. Fuel exports have financed Russia’s war, so that was a choice of immediate domestic supply over revenue.
Somewhat more common than export bans are export restrictions. Indonesia, for instance, imposes a domestic market obligation: coal producers must sell 25 percent of output at home, and coal sold to PLN, the state-owned electricity monopoly, is capped at $70 a ton.27 To earn the right to export, a producer first has to find a domestic buyer, even at a loss. The industry has chafed at the rules, but Indonesia remains the world’s largest coal exporter.28 Export taxes, in Kazakhstan and Brazil among others, do the same job more bluntly.29 And many countries simply own the oil company, so the rent flows to the treasury as dividends.30
Restrictions, taxes, and state ownership distort less than an outright ban, but the pattern is striking: none of them has hollowed out an industry the way Argentina’s ban did. Where rents are large, producers absorb the rent extraction and keep producing.
US oil and refining have little rent to give up
If so many countries can interfere with their energy industries without damaging them, an obvious question follows: can the United States do the same? If it can, an export ban is not as reckless as it sounds.
The US oil industry doesn’t have large rents and isn’t all that profitable. Production from conventional reservoirs has been declining for half a century; today the industry depends on hydraulic fracturing to extract oil from shale. The average US shale barrel costs about $45 to produce. The average Middle Eastern barrel costs $27, and Saudi Arabia’s cost far less.31 Yet US oil and Middle Eastern oil sell for roughly the same price.
Selling the same product at a higher cost makes the United States the marginal producer. Like the farmer on marginal land, it earns little rent. Since 2017 Exxon has averaged a net margin of 7 percent to Saudi Aramco’s 27 percent,32 and Aramco earned that after paying Saudi Arabia’s far higher oil taxes.
Oil refining has much lower rents than oil production, since refinery economics are not closely tied to oil well quality. The United States, then, has little rent in either business. Companies invest in the US anyway because the rules are stable: a firm that builds a refinery expects to run it unimpeded for the decades it takes to pay off.
“Companies invest in the US anyway because the rules are stable: a firm that builds a refinery expects to run it unimpeded for the decades it takes to pay off.”
Ban diesel exports and some refineries would cut runs. The producers that supplied them would scramble for new buyers. US refining and production were never very profitable to begin with, and an export ban would show that the rules here can change mid-cycle, which is exactly what long-lived investments cannot tolerate. The effects would look more like Argentina’s intervention in beef than Indonesia’s in coal. The industry is already pricing in US policy risk; Canada, as it expands production, is fast-tracking a pipeline to ship crude to Asian refineries rather than remain dependent on American buyers.33
When diesel is expensive, the whole economy groans. It hurts agriculture and trucking most of all, the veritable heart and pulse of the nation. The Trump administration needs to take action to lower diesel prices, but an export ban is a bad idea. It signals that we are an unreliable partner and would ultimately suppress new investment in oil refining and production.
- 1U.S. Energy Information Administration, “Gasoline and Diesel Fuel Update,” October 27, 2026, https://www.eia.gov/petroleum/gasdiesel/.
- 2Jill Colvin and Linley Sanders, “Most Americans Blame Trump for High Prices as His Economic Approval Hits New Low, AP-NORC Poll Shows,” Associated Press, PBS News, October 1, 2026, https://www.pbs.org/newshour/politics/most-americans-blame-trump-for-high-prices-as-his-economic-approval-hits-new-low-ap-norc-poll-shows.
- 3Lisa Lerer, “How a Democratic Blue Wave Delivered a Republican Wipeout in a Rebuke to Trump,” New York Times, November 4, 2026, https://www.nytimes.com/2026/11/04/us/politics/democratic-midterms-wipeout.html.
- 4Jocelyn Kiley et al., “Economy Ranks as Top Issue in Midterms for All Voters—but Partisans Differ over the Importance of Other Issues,” in With Americans in a Sour Mood, Democratic Voters Are More Engaged in Midterms (Washington, DC: Pew Research Center, October 8, 2026), https://www.pewresearch.org/politics/2026/10/08/economy-ranks-as-top-issue-in-midterms-for-all-voters-but-partisans-differ-over-the-importance-of-other-issues/.
- 5Alexander Bolton, “Proposed Diesel Export Ban Pits GOP Senators against Each Other,” The Hill, September 22, 2026, https://thehill.com/homenews/senate/6102916-senate-gop-diesel-export-ban/.
- 6Francisco Velasquez, “Trump Says He Would Back Ban on Diesel Exports as Pump Prices Hit Record,” BBC News, September 22, 2026, https://www.bbc.com/news/articles/cmkg7560epw0o.
- 7James Bikales, “Trump Rules Out Diesel Export Ban after Europe Agrees to Tap Stockpiles,” Politico, October 2, 2026, https://www.politico.com/news/2026/10/02/trump-rules-out-diesel-export-ban-after-europe-agrees-to-tap-stockpiles-01105569.
- 8Meghan Gordon, “Biden Administration Weighs US Oil Export Limits Again, but Analysts So Far Doubt Action,” S&P Global Energy, May 25, 2022, https://www.spglobal.com/energy/en/news-research/latest-news/crude-oil/052522-biden-administration-weighs-us-oil-export-limits-again-but-analysts-so-far-doubt-action.
- 9U.S. Department of Energy, Office of Energy Jobs, 2025 United States Energy & Employment Report (Washington, DC: U.S. Department of Energy, August 2025), 9, https://www.energy.gov/sites/default/files/2025-08/National%20USEER_08282025.pdf.
- 10Josh Bivens, Updated Employment Multipliers for the U.S. Economy (Washington, DC: Economic Policy Institute, January 23, 2019), https://www.epi.org/publication/updated-employment-multipliers-for-the-u-s-economy/.
- 11U.S. Energy Information Administration, “Distillate Fuel Oil Exports by Destination,” monthly data, thousand barrels, Petroleum & Other Liquids, released September 30, 2026, https://www.eia.gov/dnav/pet/pet_move_expc_a_EPD0_EEX_mbbl_m.htm.
- 12U.S. Energy Information Administration, “Refining Crude Oil,” Oil and Petroleum Products Explained, accessed October 29, 2026, https://www.eia.gov/energyexplained/oil-and-petroleum-products/refining-crude-oil.php.
- 13Nathan Crooks, “US Coaxing Refiners to Produce More Diesel as Prices Surge, Energy Officials Say,” Reuters, October 20, 2026, https://www.reuters.com/business/energy/us-energy-department-official-says-working-with-refiners-producing-more-diesel-2026-10-20/.
- 14Joseph Webster et al., “A Diesel Export Ban Could Disrupt US Supply Chains,” Dispatches, Atlantic Council, September 22, 2026, https://www.atlanticcouncil.org/dispatches/a-diesel-export-ban-could-disrupt-us-supply-chains/.
- 15Sean T. Pribyl et al., “DHS Extends Jones Act Waiver Again and Adds Substantial Procedural Requirements,” Holland & Knight Alert, Holland & Knight, August 13, 2026, https://www.hklaw.com/en/insights/publications/2026/08/dhs-extends-jones-act-waiver-again.
- 16Central Intelligence Agency, “Argentina: Inflation Rate (Consumer Prices),” in The World Factbook, 1990–2025 editions, accessed November 5, 2026, via CIA World Factbook Archive, https://worldfactbookarchive.org/archive/field/AR/Inflation%20rate%20(consumer%20prices).
- 17World Population Review, “Beef Consumption by Country 2026,” data from FAO, FAOSTAT Food Balances, October 28, 2026, https://worldpopulationreview.com/country-rankings/beef-consumption-by-country.
- 18Ken Joseph, Argentina: Livestock and Products—Argentine Semi-Annual Livestock 2006, GAIN Report AR6006 (Buenos Aires: USDA Foreign Agricultural Service, February 1, 2006), 2, https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Argentine+Semi-Annual+Livestock_Buenos+Aires_Argentina_02-01-2006.pdf. Whitney Eulich, “Where’s the Beef? How Argentina Humbled a Once-Mighty Economy,” Christian Science Monitor, March 8, 2015, https://www.csmonitor.com/World/Americas/2015/0308/Where-s-the-beef-How-Argentina-humbled-a-once-mighty-economy.
- 19“Argentina Partially Lifts Ban On Beef Exports,” Cattle Network, May 27, 2006, archived August 10, 2007, at the Internet Archive Wayback Machine, https://web.archive.org/web/20070810212539/http://www.cattlenetwork.com/Content.asp?ContentID=40496.
- 20Tom Johnston, “Argentina 2006 Beef Exports Dropped 21.2 Percent,” Meatingplace, January 5, 2007, https://meatingplace.com/argentina-2006-beef-exports-dropped-21-2-percent/.
- 21“Argentina Partially Lifts Ban On Beef Exports,” Cattle Network, May 27, 2006, archived August 10, 2007, at the Internet Archive Wayback Machine, https://web.archive.org/web/20070810212539/http://www.cattlenetwork.com/Content.asp?ContentID=40496.
- 22YCharts, “Argentina Real Interest Rate (I:ARIR00ZZ),” data from World Bank, World Development Indicators, last updated September 5, 2026, https://ycharts.com/indicators/argentina_real_interest_rate.
- 23Nelson Liu, “The Banning of Argentine Beef: Past, Present, and Future,” Quarterra Consulting & Advisory (blog), July 8, 2021, https://quarterraglobal.com/blog/2021/7/8/the-banning-of-argentine-beef-past-present-and-future.
- 24Whitney Eulich, “Where’s the Beef? How Argentina Humbled a Once-Mighty Economy,” Christian Science Monitor, March 8, 2015, https://www.csmonitor.com/World/Americas/2015/0308/Where-s-the-beef-How-Argentina-humbled-a-once-mighty-economy.
- 25U.S. Department of Agriculture, Economic Research Service, “Commodity Costs and Returns,” data product, updated October 1, 2026, https://www.ers.usda.gov/data-products/commodity-costs-and-returns.
- 26Whitney Eulich, “Where’s the Beef? How Argentina Humbled a Once-Mighty Economy,” Christian Science Monitor, March 8, 2015, https://www.csmonitor.com/World/Americas/2015/0308/Where-s-the-beef-How-Argentina-humbled-a-once-mighty-economy.
- 27Bernadette Christina Munthe and Fransiska Nangoy, “Indonesia’s Energy Minister Says Government Working to Secure Coal Supply for State Utility,” Reuters, June 18, 2026, https://www.reuters.com/world/asia-pacific/indonesias-energy-minister-says-government-working-secure-coal-supply-state-2026-06-18/.
- 28International Energy Agency, “Trade,” in Coal 2025 (Paris: IEA, 2025), https://www.iea.org/reports/coal-2025/trade.
- 29“Kazakhstan’s Oil Export Duties to Rise 30% in April, to $90 per Tonne,” Interfax-Kazakhstan, March 27, 2026, https://pif.interfax.kz/en/news/79093; Ricardo Brito and Marcela Ayres, “Brazil Oil Export Tax in Limbo as Court Suspends Levy, Government Extends It,” Reuters, August 27, 2026, https://www.reuters.com/business/energy/brazil-oil-export-tax-limbo-court-suspends-levy-government-extends-it-2026-08-27/.
- 30Natural Resource Governance Institute, National Oil Company Database, December 2025 version, accessed November 5, 2026, https://www.nationaloilcompanydata.org/.
- 31“Rystad Energy Reports Rising Oil Project Costs amid Inflation and Supply Chain Disruptions,” OilNOW, October 7, 2024, https://oilnow.gy/news/rystad-reports-rising-oil-project-costs-amid-inflation-and-supply-chain-disruptions.
- 32Margins are net income as a share of revenue. For 2017 and 2018, revenue here excludes the “other income related to sales” that Aramco reported separately. The chart below includes it, which lowers Aramco’s margin in those two years (from 35 to 31 percent in 2018) and brings its 2017–2025 average to about 26 percent. ExxonMobil’s average is about 7 percent either way. Exxon Mobil Corporation, Form 10-K for the Fiscal Year Ended December 31, 2019 (filed with the U.S. Securities and Exchange Commission, February 26, 2020), 37, https://www.sec.gov/Archives/edgar/data/34088/000003408820000016/xom10k2019.htm; Exxon Mobil Corporation, Form 10-K for the Fiscal Year Ended December 31, 2022 (filed with the U.S. Securities and Exchange Commission, February 22, 2023), 36, https://www.sec.gov/Archives/edgar/data/34088/000003408823000020/xom-20221231.htm; Exxon Mobil Corporation, Form 10-K for the Fiscal Year Ended December 31, 2025 (filed with the U.S. Securities and Exchange Commission, February 18, 2026), 30, https://www.sec.gov/Archives/edgar/data/34088/000003408826000045/xom-20251231.htm; Saudi Aramco, “Saudi Aramco Results 2017–2018: Consolidated Financial Statements,” excerpt from Saudi Aramco Annual Report 2018 (Dhahran: Saudi Aramco, n.d.), 3, accessed November 5, 2026, https://www.aramco.com/-/media/publications/corporate-reports/reports-and-presentations/2018/saudi-aramco-results-2017-2018-summary-financials.pdf; Saudi Aramco, Saudi Aramco Annual Report 2019 (Dhahran: Saudi Aramco, 2020), 41, https://www.aramco.com/-/media/publications/corporate-reports/annual-reports/saudi-aramco-ara-2019-english.pdf; Saudi Aramco, Saudi Aramco Annual Report 2021 (Dhahran: Saudi Aramco, 2022), 42, https://www.aramco.com/-/media/publications/corporate-reports/annual-reports/saudi-aramco-ara-2021-english.pdf; Saudi Aramco, Saudi Aramco Annual Report 2023 (Dhahran: Saudi Aramco, 2024), 34, https://www.aramco.com/-/media/publications/corporate-reports/annual-reports/saudi-aramco-ara-2023-english.pdf; Saudi Aramco, Saudi Aramco Annual Report 2025 (Dhahran: Saudi Aramco, 2026), 39, https://www.aramco.com/-/media/publications/corporate-reports/reports-and-presentations/2025/fy/saudi-aramco-ara-2025-english.pdf.
- 33David Ljunggren, “Canada to Fast Track Oil Pipeline Designed to Diversify Economy away from US,” Reuters, October 1, 2026, https://www.reuters.com/business/energy/canada-fast-track-oil-pipeline-designed-diversify-economy-away-us-2026-10-01/.
About the author
Nickolas Frassinelli /@NickFrassinelli
Nickolas Frassinelli is an independent writer and energy analyst. He is a power systems graduate student at Clemson University and was a 2026 Roots of Progress Fellow. He writes The Forward Curve - Energy, Economics, Etc., a newsletter where he explores the energy trilemma: how to make energy cheaper, cleaner, and more secure. You can find him on X at @NickFrassinelli.
