A diesel export ban could deepen global supply shortages, pressure US refiners to cut output and push fuel prices higher at home and abroad, according to the American Petroleum Institute in a Wednesday note.
US refineries have operated at record rates for months, with some exceeding 100% of nameplate capacity, as producers work to offset millions of barrels per day removed from global diesel supply.
The US supplies about 1.5 million barrels of the 8 million barrels of diesel traded globally by sea each day, or roughly 20%. API said removing those barrels could worsen shortages and disrupt global supply chains.
The US fuel market also relies on regional trade, with about 54% of refining capacity along the Gulf Coast and imports providing roughly 10% of East Coast diesel supply. Exports help Gulf Coast refiners manage surplus production.
Blocking diesel exports could fill Gulf Coast storage with excess fuel and force refiners to process less crude. That would also reduce gasoline, jet fuel and other products when global fuel supplies remain tight, API said.
"...Restricting US energy exports would only compound the problem - exacerbating refining challenges and ultimately hurting consumers. The answer is more supply and more flexibility - not new restrictions that risk making a difficult situation worse," said API President and CEO Mike Sommers.