President Donald Trump, at the United Nations General Assembly, proposed limiting or banning diesel exports to increase domestic supply and lower costs for American agriculture.
The Trump administration floated a temporary 90-day ban or restriction on U.S. diesel exports to keep more supply at home and bring down fuel costs ahead of the November midterm elecghum, tions.
With high diesel prices impacting the agricultural sector, Texas Agriculture Commissioner Sid Miller said the fuel is averaging nearly $6 a gallon ($5.938) in Texas is the most he has ever paid for diesel in his life.
Diesel cost $3.52 a gallon on average before the United States and Israel launched strikes against Iran, which led to a monthslong conflict that has dramatically slowed oil shipments through the Persian Gulf.
Miller said high input costs such as diesel, feed, and fertilizer are damaging agricultural profit margins, with cotton and farm producers reporting spending thousands of dollars each month and ready to welcome any measure to drive prices down.
Earlier in the year, Miller urged Governor Greg Abbott to temporarily suspend the state’s 20¢-per-gallon motor fuel tax on gas and undyed diesel to offer direct relief to working Texans.
Energy Secretary Chris Wright and the oil and gas industry strongly oppose a flat ban, saying it would backfire by forcing refiners to cut overall production, which could inadvertently skyrocket domestic prices for gasoline and jet fuel while destabilizing international allies like Europe.
The American Petroleum Institute (API) warned that restricting or banning exports is counterproductive and could disrupt markets and create fuel shortages.
“Ideas like this are completely counterproductive and they would only make the problem worse,” said Dustin Meyer, API senior vice president of policy, economics, and regulatory affairs in a press release. “Banning U.S. diesel exports could have severe effects on markets, force U.S. refineries to produce less fuel of all types, and further raise prices here in the United States.”
According to API, the US currently accounts for 20% of the barrels of diesel traded globally each day after disruptions to the supply during the war with Iran. Removing that much fuel from the global market would exacerbate the very global refining crisis that is increasing prices in the U.S.
Meanwhile, agricultural producers are being forced to pay higher prices on everything and struggling to even make a small profit on their crops.
The Federal Farm Bureau Federation in a July letter to Congress warned farmers are facing persistently high inflation coupled with added price volatility for critical crop inputs like fertilizer due to the closure of the Strait of Hormuz during this growing season. This has led to extremely tight operating margins and increased economic pressures on America’s farmers. An alarming number of farm families are financially underwater from the last several years of sustained losses.
“Persistent cost pressures from labor, regulatory compliance, fertilizer and energy have eroded margins, while weak commodity prices and challenging global markets have strained farm finances. Crop receipts have fallen sharply since 2022, reducing the cash flow and financial footing farmers rely on to weather downturns.”
Senate Republicans are clashing over the a proposal endorsed by Iowa Sen. Chuck Grassley and other farm-state Republicans to embargo the export of diesel. Senate Majority Leader John Thune (R-S.D.) is open to the idea, but oil-state Republicans have slammed the proposal as a gimmick.
Senator John Cornyn from Texas, and other oil state Republicans criticized the proposal, representing the nation’s largest oil-producing state, noting it wouldn’t actually boost supply though it might serve as an effective “election gimmick.”