U.S. Energy Secretary Chris Wright has cautioned oil industry executives to brace for possible restrictions on diesel exports, as debates intensify within the Trump administration over the matter. According to people familiar with the situation, Wright relayed this message during a Tuesday evening phone call with corporate leaders, just hours after President Trump stated he had urged government officials to examine export limitations.

Discussions continued into Wednesday, though no final decision has been reached. President Trump's inner circle remains divided on the issue, while oil company executives warned the White House that any ban could ultimately drive global prices higher. The details of these internal deliberations and Wright's call with industry leaders were disclosed by anonymous sources, as the discussions are not public.

On Wednesday, Wright emphasized a possible voluntary approach, suggesting the government would prefer helping the industry boost diesel supply even without an export ban. "We are working with the industry in some form of collaboration to more effectively increase U.S. diesel supply and curb upward price pressure," he said at an event hosted by The Economist. "However, this can be achieved through simpler, voluntary, and cooperative means, without resorting to heavy-handed measures that would reduce refining capacity."

He later clarified that a complete ban on diesel exports is not under consideration. "No one wants a comprehensive ban or a full halt to diesel exports," he stated at another event organized by The New York Times. "That is not the focus of the discussion. The current conversation is about the most efficient ways to channel more diesel into the United States while ensuring maximum supply of fuels like gasoline and jet fuel."

Meanwhile, a White House official dismissed a Politico report claiming the administration is drafting a 90-day diesel export ban, calling it "fake news." Sources said government officials have also reached out to some industry stakeholders to downplay the speculation generated by the report.

Significant Ramifications

Morgan Stanley has warned that American drivers should prepare for higher gasoline prices if the Trump administration proceeds with a diesel export ban. The bank cautioned that such restrictions would carry "significant ramifications." In a September 23 report, analysts led by Martijn Rats noted: "If U.S. refiners cut processing rates, a diesel export ban could have a counterintuitive effect, leading to higher gasoline prices."

The report explained that prohibiting exports would fill domestic storage tanks within weeks, forcing U.S. refiners to scale back production, which in turn would reduce gasoline output and push prices upward. These analysts wrote that domestic diesel prices would fall while overseas prices climb, with Europe identified as "the most affected region." They added that as long as the U.S. ban "remains under discussion, the oil market should brace for further volatility."

Goldman Sachs shares a similar outlook. Daan Struyven, the bank's co-head of global commodities research, said a U.S. diesel export ban would quickly fill domestic storage facilities, depress diesel prices, and ultimately lead to reduced gasoline supply while raising retail prices at the pump. "All else being equal, lower diesel prices would prompt refiners to cut production," Struyven said in a Wednesday media interview. "Since gasoline and diesel are typically produced together as bundled products, this could also result in reduced gasoline supply."