Trump Advisers Analyzing Impact of Short-Term Diesel Export Ban

(Bloomberg) -- President Donald Trump's economic advisers are analyzing the ramifications of a potential short-term ban on US diesel exports, underscoring the seriousness of the administration's consideration of the idea.

Senator John Hoeven, a Republican from North Dakota, said the study being conducted by National Economic Council Director Kevin Hassett, Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer aims to inform the administration's decision-making on possible export curbs.

"The idea is that you get Bessent and Greer and Hassett to do that analysis and if, on a short-term basis — and we are in harvest season right now — it would show that it would help, then it is something we should consider doing," Hoeven said.

Several farm-state lawmakers have urged Trump to limit foreign sales of US diesel, as conflicts in Russia and the Middle East take supplies offline and spike prices for the fuel right at the peak of the fall harvest season in the US.

Diesel is essential for powering farm equipment and is a critical fuel for modern shipping, propelling freight trains, long-haul trucks and delivery vans. And its retail cost — which hit a new high this week and averaged $6.51 per gallon on Wednesday — is adding to voter anxieties about the cost of living ahead of November's midterm elections.

A timeline for the government's economic analysis was not immediately available. But the study, described by people familiar with the matter, is expected to forecast a mix of potential consequences — including both lower and higher prices — that could be used by administration officials either to justify or ward off a ban.

The study shouldn't be viewed as an indication the administration is leaning one way or the other, one of the people said. Instead, it's a standard analysis, like others routinely used by the White House to examine potential economic policies, the person said.

Energy experts have said export curbs could yield temporary price discounts on diesel initially, with refiners blocked from selling to foreign buyers. However, those short-term price reductions would likely fade swiftly — and be replaced with even higher costs — as rising US fuel inventories prompt oil producers and refiners to cut output.