In a recent blog post on its website, American Fuel and Petrochemical Manufacturers (AFPM) explains why a diesel export ban would backfire for the US:
It may seem logical that if the US stops exporting diesel, more fuel will stay here and prices will fall. But more diesel in the US does not necessarily mean lower prices at the pump, especially when the US is not facing a shortage of diesel.
If refiners cannot export or economically store surplus diesel, some could reduce production, which tightens supplies, puts upward pressure on fuel prices and weakens US energy security.
Export bans reduce fuel production
Today, US refineries are producing about 5.3 million bpd of distillate fuel, while domestic demand averages about 3.6 million bpd.
If exports are banned, refiners cannot simply stockpile unlimited diesel. They would have to reduce production. Because gasoline and diesel are produced together, producing less diesel also means producing less gasoline.
Less fuel production means tighter supplies and higher prices for both diesel and gasoline.
Export bans weaken US energy security
Many parts of the US rely on imported gasoline and diesel because fuel produced in the US cannot always be moved economically from where it is produced to where it is needed.
Removing US diesel from global markets would tighten supplies and could increase costs for import-dependent regions like New England, especially as heating oil demand rises as the weather turns colder.
Export bans help foreign competitors
The US is a major supplier of fuel to allies in Europe and the Americas. If US exports disappear, those countries will still need fuel. They will need to find it from other suppliers, creating opportunities for competing nations to expand their influence in global energy markets.
Export bans risk retaliation
Trading partners affected by a US export ban could respond with restrictions of their own, making the US more vulnerable to future supply disruptions. Regions that depend on imports would be particularly exposed.
Key takeaway
Export bans do not create more fuel for Americans. They reduce US fuel production, put upward pressure on prices, weaken energy security, and hand market share to foreign competitors.