With about 40 days left before the U.S. midterm elections, the Trump administration and the ruling Republican Party are scrambling to bring down diesel prices that have surged to record highs. President Donald Trump pressed Ukraine to immediately stop attacking Russian refining facilities, while some Republican lawmakers are calling for a complete halt to diesel exports. Analysts say prices are unlikely to ease as long as the underlying cause — the war in the Middle East — remains unresolved.
"Diesel, diesel, diesel!"
According to the Financial Times on the 21st, Trump spoke by phone the previous day with Ukrainian President Volodymyr Zelenskyy and urged him to stop the strikes, saying attacks on Russian refining facilities were worsening a global diesel shortage and driving prices higher. Hours before the call, a major refinery in Moscow was engulfed in flames after a Ukrainian drone attack that killed at least two people — meaning Trump used the call to lodge a blunt protest with Zelenskyy. Moscow said Ukraine had carried out its largest drone assault to date and that its air defenses had shot down 450 drones alone. A senior Ukrainian official told the FT that "President Trump's core message was 'diesel, diesel, diesel.'" Trump later wrote on his social media platform Truth Social that the "ridiculous and endless war" between Russia and Ukraine must come to an end.
Trump's phone protest came as the U.S. national average diesel price hit a record $6.51 a gallon that day. Prices have jumped more than 70% since February, when war broke out between the United States and Iran. U.S. media report that frustration with the government is mounting among truckers and among farmers heading into harvest season. For an administration facing midterm elections in about 40 days, the price spike amounts to a serious setback.
Zelenskyy is set to visit the United States on the 22nd to attend the United Nations General Assembly in New York, where he is scheduled to hold a summit with Trump. Trump is likely to press him on the issue again at that meeting.
Weighing the embargo card
Against this backdrop, voices within the Republican Party are calling for an immediate halt to diesel exports to increase supplies available to Americans. The demand is loudest in the farm states of Iowa and Tennessee. Sen. Chuck Grassley of Iowa wrote on X, formerly Twitter, that high diesel prices were wiping out farmers' income and that if the United States can ban semiconductor exports to China, it can also ban diesel exports to help American farmers and truck drivers. Rep. Zach Nunn of Iowa said American energy should be sold to Americans first. Rep. Tim Burchett of Tennessee introduced a bill to suspend diesel exports through January of next year. He also proposed separate legislation that would halt exports whenever the national average diesel price exceeds $5 a gallon.
The United States is a major supplier, exporting about 1.5 million barrels of diesel a day. American product accounts for 20% of global seaborne diesel trade. A sudden halt to U.S. exports would deliver a supply shock to Europe and South America, the main importers. International diesel prices, already elevated on tight supply, would climb further.
Supply chain damage would be unavoidable; the election is the variable
Those repercussions are also why a U.S. diesel embargo is unlikely to materialize. The FT reported that the American oil industry expects that even with exports halted, it would take considerable time for supplies to reach the entire country because refining capacity is concentrated along the U.S. Gulf Coast. In the meantime, diesel prices would rise further, deepening the harm to American consumers. Consulting firm Rapidan Energy put the probability of the White House imposing an export ban at 35%.
Still, the approaching election could sharpen the impatience of the administration and the Republican Party. Senate Majority Leader John Thune said recently that he would look at anything that could be a real solution for bringing down diesel prices and that an export ban could be one way to address the problem, leaving the door open to an embargo. Bob McNally, founder of Rapidan Energy, said the more cornered they become, the more desperate the Trump administration and the Republican Party will be.
