Hot Topics Recap: US Energy Secretary Wright Says Diesel Export Ban "Definitely Won't Work," Clashing Publicly with Trump

【Hot Topics Recap: US Energy Secretary Wright Says Diesel Export Ban "Definitely Won't Work," Clashing Publicly with Trump】

(1) US Energy Secretary Wright said on Wednesday that a US ban on diesel exports would not work and could push up gasoline and jet fuel prices, a stance at odds with President Trump, who supports the idea.

(2) Diesel prices have surged to record highs due to the wars involving the US and Israel with Iran, as well as the Ukraine conflict, sparking discontent among farmers and other diesel users. The midterm elections in November will determine control of Congress.

(3) "A one-size-fits-all approach like banning diesel exports definitely won't work," Wright said at an event in New York. He added that if refiners cannot export the diesel they produce, storage space would run out, forcing them to cut US refining output, which would put upward pressure on gasoline and jet fuel prices.

(4) Wright's remarks are particularly notable because it is rare in this administration for a cabinet member to publicly disagree with Trump, as senior officials typically align closely with the president's stance.

(5) Trump's Republican allies are seeking to maintain their narrow control of both chambers of Congress in the November 3 elections, and record fuel prices pose a risk to Trump. Global diesel supply is tight, and there are few obvious ways to quickly lower prices. The administration is facing calls from Republicans in heated races to take action.

(6) US Agriculture Secretary Rollins has also raised the issue of high diesel prices with the president, but other senior US officials oppose an export ban. US Interior Secretary Burgum said such a ban could invite retaliation from countries that export fuel to the US, potentially harming states like California.

(7) Many energy analysts also believe a ban could push fuel prices higher, as the resulting domestic supply glut would force refiners to cut output. TACenergy analysts wrote in a note on Wednesday: "Losing export capability would force many refiners to lower utilization rates and reduce output of gasoline and other products, which would be counterproductive."

(8) A White House official said Trump "wants to see gasoline prices at the pump come down and is evaluating all viable options."