Politico reported that the Trump administration was considering a 90-day ban on diesel exports to lower energy prices in the United States and ease fuel-price pressure on Republican candidates ahead of the Nov. 3 midterm elections.
People familiar with the plan said high fuel prices had become a political problem for the Republican Party. Republicans are seeking to retain their majorities in the House of Representatives and the Senate in the midterm elections.
Fuel producers in the United States opposed halting exports. The producers warned that any short-term benefit could be erased by higher fuel prices later on.
Diesel prices reach $6.52 per gallon
According to data from the American Automobile Association, diesel prices in the United States hit a record $6.52 per gallon. The price stood at $2.83 last year.
Politico's report attributed the sharp increase to developments in energy markets, as well as the Trump administration's war against Iran and Ukraine's attacks on Russian refineries.
One industry executive said Trump appeared inclined to announce the ban by the weekend and viewed any political backlash as a problem for later. The executive also said calls for urgent action on fuel prices at the White House had overtaken more cautious approaches.
Export restriction could affect global markets
The White House and the Department of Energy did not confirm the allegation. A White House official called Politico's report "fake news."
Economists said halting U.S. diesel exports could have ripple effects across global markets. Countries have become more dependent on U.S. diesel, and such a ban could further increase prices outside the United States in the short term.
David Oxley, chief climate and commodities economist at Capital Economics, said an export ban would intensify existing pressure in the global diesel market. Oxley said a surplus of diesel in the United States could force refineries to reduce supplies of petroleum products within a few weeks, causing the restriction to backfire over the long term.
If the United States limits energy exports, it would be the first such restriction since the Barack Obama administration lifted a decades-old ban on oil exports in 2015.
