With diesel prices surging and the Trump administration reportedly considering a 90-day ban on diesel exports, Cato Institute scholars Krit Chanwong, Travis Fisher, and Michael Abi-Nader argue in new analysis that restricting exports could ultimately make the problem worse.

  • An export ban is unlikely to deliver lasting relief at the pump. The authors argue that because fuel prices are tied closely to global markets, any initial decline in U.S. diesel prices would likely be temporary. As refiners cut production in response to being shut out of export markets, domestic prices would begin converging with global prices again.
  • The diesel trapped on the Gulf Coast could not easily reach the regions experiencing the biggest price increases. There are no pipelines connecting the Gulf Coast to the West Coast or Rocky Mountain region, while existing pipeline capacity to the Midwest could accommodate less than 10 percent of the diesel currently exported from the Gulf Coast.

Rather than restricting exports, the authors argue policymakers should reduce barriers to getting more fuel to consumers, including revisiting renewable fuel mandates, repealing the Jones Act, and making it easier to build and expand pipelines.

If you’d like to speak with Krit or Travis about diesel prices, the potential consequences of an export ban, or what policymakers could do instead, I’m happy to connect you.