Restricting US diesel exports could provide temporary relief in parts of the domestic market, but Europe and Latin America would face tighter supplies and stronger competition for barrels from India, Kpler said in a post on X on Wednesday.
Depleted East Coast inventories would still need logistical support, including continued Jones Act flexibility, while the initial price benefit could fade as US diesel prices potentially climb again as exports resume.
US retail diesel prices reached a record $5.97 per gallon as tight inventories and strong exports fuel debate over possible policy responses, Kpler said in a note last week.
US refiners have limited room to raise output, with utilization above 95% for much of summer and about 98% in late August. August crude runs reached 17.3 million barrels per day, while inventories fell to 108 million barrels, 13% below the five-year average.
Kpler outlined options ranging from leaving exports unrestricted and easing regulations to imposing a temporary ban, export quotas, or licensing. Regulatory flexibility could raise diesel availability, while quotas could retain export access and limit disruption to refiners.
A full ban could initially boost US inventories and lower Gulf Coast prices, but weaker refining margins could reduce output and logistical limits could hinder redistribution. An export duty could also curb shipments, but US constitutional rules create significant legal challenges.