The White House has assured US Senator Ted Cruz that the administration of President Donald Trump will not implement a ban on American diesel exports. According to individuals familiar with the matter who spoke on the condition of anonymity due to the private nature of the discussions, Cruz conveyed the message to refining industry leaders during a late-night phone call on Friday.
White House Assures Refining Leaders That US Diesel Exports Will Not Be Banned
Cruz, a prominent ally of Trump representing Texas, clarified that the assurances came from the White House rather than from the president himself, and he did not specify which administration officials ruled out the export restriction. Representatives for Cruz and the American Fuel & Petrochemical Manufacturers, the organization that arranged the call, did not immediately respond to requests for comment.
The assurances align with a stance maintained by several senior aides over previous months warning that restricting diesel shipments would ultimately cause more harm than benefit. However, Trump has occasionally taken unpredictable approaches and pursued unconventional measures without the full backing of his top aides, retaining ultimate decision-making authority.
Weighing Options to Lower Record Retail Fuel Prices
The outreach to refining leaders occurred as the administration evaluates various options to reduce diesel costs amid a historical surge in fuel prices. Earlier in the week, Trump stated that he asked staff to examine a potential diesel export ban after lawmakers representing rural areas and agricultural states urged restrictions to curb retail prices. Those retail costs reached a record $6.53 per gallon for the first time earlier in the week.
A White House official reiterated that the president wants to see fuel prices drop at the pump and is reviewing all options on the table. The administration and its officials continue to analyze the economic impacts of a potential short-term export ban alongside other measures to alleviate high diesel expenses. The United States is the world’s largest diesel exporter, with net exports of approximately 1.2 million barrels per day out of a total domestic production of 5.1 million barrels daily, according to data from Morgan Stanley.
Energy Secretary Chris Wright stated that the administration is not pursuing a comprehensive export ban and instead encouraged the refining sector to make voluntary changes to boost diesel supplies. We will not stop US diesel exports, but could there be some adjustment in the destination flow of diesel from US refineries? I think we will see that because it can stop the rise in the price of diesel, Wright said during a conversation broadcast by the website Heatmap.
Proposed Alternatives Involve Red Diesel and Biofuels
Among the alternative ideas under discussion is expanding the sale of red diesel, a fuel typically designated for off-road vehicles and equipment that is generally exempt from taxes. Such an approach could effectively suspend certain production taxes, including a federal levy of approximately 24 cents per gallon. Allowing a broader framework for red diesel to be used both on and off public roads could lower expenses for farmers, truck drivers, and other consumers.
Industry representatives also proposed that the administration exempt red diesel from a federal biofuel blending program known as the Renewable Fuel Standard. According to industry estimates, excluding red diesel from the production volumes used to calculate mandatory blending quotas for each refinery—while allowing agricultural users to purchase the exempt fuel—could decrease prices by roughly 30 cents per gallon.
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