U.S. President Donald Trump on Tuesday said he backed the idea of a potential U.S. diesel export ban as a way to lower prices for Americans, which experts say may backfire and cost consumers more in the long term, including in Canada.
The ban could potentially be over a 90-day period, according to a report from Politico on Wednesday citing five people familiar with the discussions.
This comes after Trump made comments to reporters Tuesday while meeting with Ukrainian President Volodymyr Zelensky at a UN General Assembly, and said, “I’ve called for that too. I’ve said, ‘Let’s not send out the diesel.’ We make a lot of diesel. That could have a little bit of an effect on regular automobile gasoline.”
Scott Bessent, the secretary of the treasury, was also in attendance, and said Washington is examining “whether it’s feasible in terms of the overall refining capacity and whether a full or partial ban would work.”
Those comments come as average U.S. diesel prices have jumped to a record US$6.5107 a gallon, according to American Automobile Association (AAA), while Canadian diesel prices are over CA$2 per litre on average as of publication.
Banning export of the fuel would be expected to provide some short-term relief for American consumers while spiking prices worldwide.
Over the long-term, prices could stay higher for longer, experts warn.
“Diesel is the backbone of the economy for trains, for ships, for trucks, so many trucks around the world. We depend on it,” says Richard Masson, former CEO of the Alberta Petroleum Marketing Commission.
“If there is an upset in the market, and the diesel price is already really, really high, it will just further exacerbate the problem, but people need to keep their economies running so they’re going to have to continue to pay the price.”
Masson says he believes the U.S. banning the exports of diesel is unlikely, but if it were to happen, it would add significant pressure to an already disrupted global marketplace.
Diesel prices have surged amid supply disruptions from Ukrainian strikes on Russia’s refineries and the U.S.-Iran war, which has disrupted or halted trade along major routes including the Strait of Hormuz.
The U.S. is a major exporter of diesel, and countries have increasingly turned to it amid disruptions abroad.
The U.S. exported a record 1.6 million barrels per day of diesel in August, up from about one million in February before the war began. Top buyers include Brazil, Chile, Mexico, Peru, Morocco, France and the United Kingdom, according to Kpler, a commodities statistics platform.
“Restricting U.S. diesel exports would wreak havoc on fuel markets at home and abroad, destabilize refinery operations and deepen a global refining crisis already putting upward pressure on U.S. prices,” the American Petroleum Institute said in a statement.
A ban on diesel exports would push up prices of diesel globally, while pushing down prices in the United States in the short term and hurting U.S. refining margins, analysts speaking with Reuters warned.
“Initially, a diesel ban would send global prices skyrocketing … A ban could raise world prices by as much as 100 per cent, given the fuel’s low price elasticity of demand,” said energy economist Philip Verleger.
“Banning exports of diesel would drive refiners to cut runs because the physical market they can access would be cut, and no market participant in any market sells product at a loss. While an export ban might have a very short-term impact that lowers price, it would not be long-lived,” said Kenneth Medlock III, a fellow in Energy and Resource Economics at the Baker Institute for Public Policy.
Shortages in the fuel can lead to price spikes that stoke inflation by raising the cost of moving everything from groceries and consumer goods to industrial materials — already a major pain point for Trump and Republicans headed into the November midterm elections.
Oil and gas prices are mostly set globally based on expectations for supply and demand, which means if the U.S. moves to ban the export of diesel fuel, then there would likely be a glut of fuel available that can’t leave the country.
This could potentially lead to lower prices in the short-term, as those diesel supplies dwindle to meet the new level of domestic demand. At the same time, global prices for diesel would skyrocket because the U.S. is no longer a source of the fuel.
“If you ban diesel exports, then you have to be able to move that diesel somewhere else and sell it,” says Masson.
“The likely outcome if he bans diesel is there will be less oil being processed in U.S. refineries, particularly in the Gulf Coast, and that will mean lower overall supplies. It may mean a little bit better pricing for some consumers in the U.S., but it may mean worse pricing for many.”
Although this means the cost of diesel would likely increase further, Masson says Canadian diesel producers would likely benefit as a result.
“If that 1.6 million barrels a day isn’t in the market anymore, everybody else in the world is going to be scrambling to find supplies, and they’re going to come knocking at the Canadian door and ask for our supplies,” says Masson.
“They’ll ask by saying, ‘We’ll pay you more if you can get it to us.’ And so prices move up. And that’s kind of the mechanism that would be a play.”
At the same time, Masson says that spike in demand for diesel fuel “could result in higher prices for Canadians.”
– with files from Reuters
© 2026 Global News, a division of Corus Entertainment Inc.
Ad Choices
