The U.S. has been grappling with high diesel prices, despite producing more diesel than it consumes. The crux of the issue lies not in production, but in the distribution system, which is proving to be cost-ineffective.
Phillip Bruner, Professor of Practice of Sustainable Finance Education at the University of Washington’s Foster School of Business, in an email interview with Benzinga, said that the lack of an affordable transportation method to the coasts, where prices are highest, is posing a significant challenge.
According to AAA, the average diesel price on Friday was $6.3726 per gallon, after hitting a high of $6.5276 on September 22.
Diesel Surplus Trapped on Gulf Coast
The professor elaborated that despite the U.S. having a diesel surplus “on paper,” much of that excess is concentrated on the Gulf Coast, far from higher-priced East and West Coast markets.
“The fuel is in the wrong place,” he said.
He further explained that Gulf Coast fuel faces transportation bottlenecks: pipelines to the East Coast are already heavily utilized, while the West Coast lacks a pipeline connection. Shipping fuel is also costly because U.S. law generally requires scarce and expensive American-built tankers.
Additionally, the professor flagged that the global economy is facing a shortage of refineries due to ongoing conflicts.
Diesel Ban Prospects Raise Concerns
President Donald Trump is reportedly considering imposing a diesel export ban. The administration had reportedly informed foreign allies, including the U.K., about potential disruptions to their supplies.
Notably, on Friday, French President Emmanuel Macron, the chair of the G7 nations, announced that the group agreed to release up to 100 million barrels of emergency oil and diesel stocks over four months, while pledging to avoid energy export restrictions. However, the Trump administration has not formally ruled out export restrictions as a future option.
Bruner said a ban would do little to lower prices, warning that it “would crater prices in Texas while the coasts keep buying imported diesel at world prices.” He also stated that a diesel export ban could hurt Mexico and raise U.S. grocery prices because Mexico has limited diesel reserves and its trucks transport much of America’s produce.
According to the Energy Information Administration (EIA), the U.S. exported about 3.94 million barrels of distillate fuel oil in 2025, for which Mexico, Chile and Brazil were the top destinations.
Ban Could Raise Gasoline, Jet Fuel Prices
Bruner also cautioned that an export ban could trigger a rise in prices for gasoline and jet fuel, as refiners cannot curtail diesel production without affecting the production of other fuels. On Wednesday, Trump acknowledged that a ban could raise other prices, particularly gasoline, while lowering diesel prices somewhat.
The average gas price on Friday was $4.3961per gallon, according to AAA.
Diplomacy, Not a Ban, Offers a Better Solution
The professor opines that a ban on diesel exports would not alleviate these issues. He suggests that allowing foreign ships to transport fuel between U.S. ports, reducing fuel taxes for truckers and farmers, and protecting tankers in the Strait of Hormuz to facilitate the resumption of Middle Eastern refineries could be a more plausible solution right now.
However, it would require “effective diplomacy,” said Bruner.
Image via Shutterstock
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