Iowa Senator Grassley Pushes Trump for Diesel Export Ban as Prices Hit Record Highs

Diesel prices have surged to record levels across the United States, and Iowa Senator Chuck Grassley is calling on President Donald Trump to take immediate action. With the national average price for a gallon of diesel reaching $6.50 on Friday, up from $5.61 just a month earlier, the cost of living has become a dominant issue for voters ahead of the midterm elections.

Grassley, a Republican from Iowa, has urged the president to implement a temporary halt on diesel exports through executive action. The move comes as global tensions, including the standoff with Iran and the ongoing Russia-Ukraine war, continue to disrupt key oil and fuel trade routes.

Why are diesel prices so high?

Even though the United States is the world's largest diesel exporter, diesel is traded on a global market. Disruptions to refineries in Russia and the Middle East have reduced the worldwide fuel supply, putting more pressure on American producers to fill the gap. In Russia, drone attacks have damaged major refineries, forcing production cutbacks or halts.

Rachel Ziemba, senior adjunct fellow at the Center for a New American Security, told Al Jazeera that while US refineries are running at full tilt, the global gaps remain. US diesel supplies are also shrinking, with inventories falling to 107.9 million barrels as of September 11, the lowest in more than four decades, according to the US Energy Information Administration.

Because American producers can sell their fuel into the global market, they are drawn to soaring international prices rather than setting lower prices for domestic consumers. This dynamic has pushed diesel prices higher around the world, including in the US.

What is Grassley pushing for?

On Tuesday, Grassley called on the president to put in place a temporary halt on exports. I encourage President Trump to put a temporary embargo on diesel exports through executive action, Grassley said.

Republican Senator Dan Sullivan of Alaska made a similar call, stating, The cost of diesel is just too damn high. I'm calling for a temporary pause of American diesel exports so that we can rebuild our reserves ahead of winter.

In the House of Representatives, Congressman Tim Burchett of Tennessee introduced two bills that would restrict US diesel exports. One would impose a ban through January 2027, while the other would restrict exports if the national average price reaches $5 a gallon.

The administration has not made any official policy announcements, and the White House told Al Jazeera that the president is evaluating all options.

Could an export ban backfire?

Energy analysts and industry groups have warned that an export ban could have unintended consequences, potentially pushing up fuel prices in the US and abroad. Patrick De Haan, head of petroleum analysis at GasBuddy, explained on X that diesel trades on a world market, just like corn. Farmers don't sell cheaper to Americans, and refiners can't either since they buy crude at global prices. Force a lower price and they'll make less diesel. Less supply means higher prices, not lower.

Analysts at Wood Mackenzie, a research and consulting firm, say that keeping more diesel stateside would ultimately fill up US storage tanks but also force refineries to cut production. That could affect other markets that rely heavily on US fuel, including Latin America and Europe, forcing them to compete with other global buyers for supplies and driving up prices for the global market.

Wood Mackenzie says China is the only major producer with enough spare refining capacity to potentially make up much of the shortfall. China is currently the only country with material spare refining capacity that could cover the loss of US refinery throughputs. However, China may well decide it is not in its interest to intercede, analysts said.

Who would an export ban affect?

An export ban would affect US refiners and consumers, as well as countries that rely on US diesel. Maksim Sonin, visiting scholar at Stanford University's Precourt Institute for Energy, told Al Jazeera that export bans may provide temporary relief, but diesel is a global commodity. Treat one part of the system, and the effects travel elsewhere. Trade-offs are inevitable.

Disruptions to US exports could reduce the amount of fuel available on the global market. Wood Mackenzie analysts say countries in Europe and Latin America that rely heavily on US fuel could be forced to compete with other producers for supplies.

Ziemba added that European and Asian product prices would increase as buyers of US fuel, mostly in Latin America, scramble to find new supplies. She suggested the US may opt for a mixture of carrots and sticks, potentially including voluntary export quotas rather than a formal ban, and exemptions for countries that provide crude oil to the US, like Mexico.

The broader concern from analysts is that restricting exports could reduce US refinery production rather than simply redirecting diesel to US consumers, potentially putting upward pressure on fuel prices both domestically and internationally. Ziemba concluded, It's unlikely to help US consumers much given how it fails to solve underlying problems and could backfire if refineries hold on to production. The best way to address this is to end the conflicts prompting the shortages.