US Diesel Export Ban Could Spike Gasoline Prices, Warns Rystad Energy

A proposed U.S. ban on diesel exports could temporarily lower domestic diesel costs but trigger severe price spikes across all other refined petroleum products, according to an analysis released by Rystad Energy. The Trump administration is weighing the restriction following record highs in U.S. diesel pricing.

The Bottom Line

• Production Bottleneck: Crude oil refining yields both diesel and gasoline, meaning refiners can only to a limited extent choose to avoid diesel production.
• Regional Volume Loss: Rystad Energy projects that gasoline output in the U.S. Gulf Coast alone could drop by 2 million barrels per day under an export ban.
• Global Supply Deficit: The United States currently ships out over 1,5 million barrels of diesel and gasoil daily, with Europe and South America importing significant volumes.

The Mechanics of Joint-Product Refining Constraints

When crude oil is refined, it yields both diesel and gasoline. Refiners cannot simply get gasoline out of the crude oil. According to Susan Bell, senior vice president for the oil market at Rystad Energy, the proposed policy fails to account for these limits. “The proposed U.S. ban on diesel exports will not work as the U.S. administration expects. Although it may temporarily lower domestic diesel prices, it will cause prices for all other refined products to skyrocket,” Bell noted in a market update.

If the federal government halts diesel exports and the U.S. market does not need all the diesel, operators face an operational ceiling. They must process less crude oil. That reduction in crude throughput directly depresses the production volumes of gasoline.

Quantifying the Gulf Coast Production Drop

The scale of America’s export exposure dictates the magnitude of the downstream shock. Industry data shows that the United States routinely exports in excess of 1,5 million barrels of diesel and gasoil daily. Major international destinations rely on these barrels:

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• Europe: Imports approximately 400.000 barrels per day.
• South America: Imports approximately 800.000 barrels per day.

If refiners along the U.S. Gulf Coast are forced to scale back runs because foreign markets are walled off, Rystad Energy estimates that local gasoline production alone could fall by 2 million barrels daily.

U.S. Daily Export Volume and Projected Production Impact

Region / Product	Volume (Barrels / Day)	Market Destination / Effect
Total U.S. Diesel & Gasoil Exports	> 1,5 million bpd	Global supply baseline
European Imports	~ 400.000 bpd	Atlantic Basin supply balance
South American Imports	~ 800.000 bpd	Western Hemisphere demand sink
Gulf Coast Gasoline Reduction (Projected)	~ 2 million bpd	Potential domestic supply deficit under ban

Global Supply Chain Repercussions

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