Trump Says US to Hold Off on Diesel Export Ban After G7 Release

(Bloomberg) -- President Donald Trump said he won't ban US diesel exports, after Group of Seven nations and their partners agreed to release some of their emergency fuel stockpiles in a bid to bring down soaring prices.

"Europe has a lot of diesel and they're going to be making a major world contribution — and so are we," Trump told reporters Friday at the White House. "And we're not going to be doing the export ban."

The bloc, which includes major economies from Europe, North America and Asia, agreed to release as much as 100 million barrels of emergency oil and diesel stocks on Friday, after an intense pressure campaign from the Trump administration.

"I did ask them, and we're going to have a lot of oil," Trump added. "They did a great job."

Trump's declaration comes amid a record surge in prices for diesel, which fuels much of the modern economy, powering farm equipment, propelling US shipping and supplying heat and power to rural communities.

Diesel's critical role as the lifeblood of shipping and commerce means the price increase has rippled through the economy, spurring higher costs for an array of consumer goods ahead of the November midterm elections.

The president's decision marks a retreat from his earlier consideration of possible diesel export curbs as well as a rebuff of endangered rural and Midwest Republicans who'd sought those limits to slash fuel prices weighing heavily on voters before the election.

Trump on Friday maintained the diesel export ban was never a serious option. "We were never going to do it," he told reporters. "I don't think we were."

Last month, the president said he had encouraged his advisers to support it.

Trump's current approach also represents a bid to thread the needle between two core constituencies: agricultural communities in the heartland, where some Republican incumbents are in tough races, and oil interests that have benefited from the president's support of fossil fuels.

In recent weeks, a number of prominent Republicans, including Senators Chuck Grassley of Iowa and Dan Sullivan of Alaska, who faces a tight reelection contest, had encouraged export curbs.

Yet oil industry leaders and energy experts warned that limiting foreign diesel sales would at most provide only short-term price relief followed by a rapid upswing in costs as swelling domestic inventories prompt US oil producers and refiners to cut production.