U.S. President Donald Trump on Tuesday said he backed the idea of a potential U.S. diesel export ban as a way to lower prices for Americans, which experts say may backfire and cost consumers more in the long term, including in Canada.
The ban could potentially be over a 90-day period, according to a report from Politico on Wednesday citing five people familiar with the discussions.
This comes after Trump made comments to reporters Tuesday while meeting with Ukrainian President Volodymyr Zelensky at a UN General Assembly, and said, “I’ve called for that too. I’ve said, ‘Let’s not send out the diesel.’ We make a lot of diesel. That could have a little bit of an effect on regular automobile gasoline.”
Scott Bessent, the secretary of the treasury, was also in attendance, and said Washington is examining “whether it’s feasible in terms of the overall refining capacity and whether a full or partial ban would work.”
Those comments come as average U.S. diesel prices have jumped to a record US$6.5107 a gallon, according to American Automobile Association (AAA), while Canadian diesel prices are over CA$2 per litre on average as of publication.
Banning export of the fuel would be expected to provide some short-term relief for American consumers while spiking prices worldwide.
Over the long-term, prices could stay higher for longer, experts warn.
“Diesel is the backbone of the economy for trains, for ships, for trucks, so many trucks around the world. We depend on it,” says Richard Masson, former CEO of the Alberta Petroleum Marketing Commission.
“If there is an upset in the market, and the diesel price is already really, really high, it will just further exacerbate the problem, but people need to keep their economies running so they’re going to have to continue to pay the price.”
Masson says he believes the U.S. banning the exports of diesel is unlikely, but if it were to happen, it would add significant pressure to an already disrupted global marketplace.
Why are diesel prices high?
Diesel prices have surged amid supply disruptions from Ukrainian strikes on Russia’s refineries and the U.S.-Iran war, which has disrupted or halted trade along major routes including the Strait of Hormuz.
The U.S. is a major exporter of diesel, and countries have increasingly turned to it amid disruptions abroad.
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The U.S. exported a record 1.6 million barrels per day of diesel in August, up from about one million in February before the war began. Top buyers include Brazil, Chile, Mexico, Peru, Morocco, France and the United Kingdom, according to Kpler, a commodities statistics platform.
“Restricting U.S. diesel exports would wreak havoc on fuel markets at home and abroad, destabilize refinery operations and deepen a global refining crisis already putting upward pressure on U.S. prices,” the American Petroleum Institute said in a statement.
A ban on diesel exports would push up prices of diesel globally, while pushing down prices in the United States in the short term and hurting U.S. refining margins, analysts speaking with Reuters warned.
“Initially, a diesel ban would send global prices skyrocketing … A ban could raise world prices by as much as 100 per cent, given the fuel’s low price elasticity of demand,” said energy economist Philip Verleger.
“Banning exports of diesel would drive refiners to cut runs because the physical market they can access would be cut, and no market participant in any market sells product at a loss. While an export ban might have a very short-term impact that lowers price, it would not be long-lived,” said Kenneth Medlock III, a fellow in Energy and Resource Economics at the Baker Institute for Public Policy.
Shortages in the fuel can lead to price spikes that stoke inflation by raising the cost of moving everything from groceries and consumer goods to industrial materials — already a major pain point for Trump and Republicans headed into the November midterm elections.
What a U.S. diesel export ban would mean for Canada
Oil and gas prices are mostly set globally based on expectations for supply and demand, which means if the U.S. moves to ban the export of diesel fuel, then there would likely be a glut of fuel available that can’t leave the country.
This could potentially lead to lower prices in the short-term, as those diesel supplies dwindle to meet the new level of domestic demand. At the same time, global prices for diesel would skyrocket because the U.S. is no longer a source of the fuel.
“If you ban diesel exports, then you have to be able to move that diesel somewhere else and sell it,” says Masson.
Although this means the cost of diesel would likely increase further, Masson says Canadian diesel producers would likely benefit as a result.
“If that 1.6 million barrels a day isn’t in the market anymore, everybody else in the world is going to be scrambling to find supplies, and they’re going to come knocking at the Canadian door and ask for our supplies,” says Masson.
“They’ll ask by saying, ‘We’ll pay you more if you can get it to us.’ And so prices move up. And that’s kind of the mechanism that would be a play.”
At the same time, Masson says that spike in demand for diesel fuel “could result in higher prices for Canadians.”
– with files from Reuters
Where does US get the pil it needs to produce diesel? I think maybe Canada. What if Canada were to cut heavy oil to US?
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Do it! That’ll f *uck the living hell out of Ontario and Quebec.
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Anonymous: Nice that you have learned to accept your diagnosis as a chronic Trump D!ck Sucker. Try not to bruise your knees too badly.
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It would mean hell on earth for Liberals.
@Anonymous. Sturgeon refinery by Gibbons, Alberta was built in the 2010s.
Alberta has its own diesel and I thought Ontario and Quebec want led to go green and drive EVs.
The US is not longer a free capitalist country when it constantly intervenes like this. And the US has purchased stakes in Intel, US steel, Westinghouse, MP materials, etc. Isn’t that what MAGA and Poilievre conservatives call communism?
T.d.s. is still very strong here. Grow some Grey matter !!
It’s funny Liberals are worried about the US.
I hope he does it so canadians can get what they deserve.
Why does nobody take Canada seriously? It’s like the country never exists in the realm of things.
Ok. I see. Sjdlsmsnckskandnd927472?”!’+#,*
You TDS deranged lunatics it’s not a trump thing. Get off global and cbc propaganda. The truth is out there. Open your mind for once in your life and search for truth
The war with Iran is real. The Strait of Hormuz is constrained. Fuel exports are disrupted. That is a factor. But if you stop there you will never understand why $6 diesel is happening now when crude oil is not even close to its all time high.
Crude oil hit $100 per barrel this week. That sounds like a lot until you adjust for inflation. In 2008, crude hit $147 per barrel. Adjusted to today’s dollars that is over $210. In 1980 during the Iranian Revolution, crude hit $36 per barrel. Adjusted to today’s dollars that is over $160. The current price of crude is well below both of those peaks in real terms.
But diesel was never $6 during those crises. Not in 1980. Not in 2008. Not ever.
The barrel price does not explain $6 diesel. Something else does. And that something else is the part nobody in Washington wants to talk about.
Between 2020 and 2026, 11 major U.S. oil refineries permanently closed or stopped refining crude oil. Not temporarily shut down. Permanently gone. The combined capacity lost is approximately 1.72 million barrels per day gross, roughly 900,000 barrels per day net after accounting for some expansions at remaining facilities.
These were not small operations. Philadelphia Energy Solutions in Pennsylvania, 335,000 barrels per day. Shell Convent in Louisiana, 211,146 barrels per day. Phillips 66 Alliance in Belle Chasse, Louisiana, 255,000 barrels per day. Marathon Petroleum in Martinez, California, 161,000 barrels per day. LyondellBasell in Houston, 263,776 barrels per day. Phillips 66 in Los Angeles, 138,700 barrels per day. Valero in Benicia, California, 145,000 barrels per day. And several more.
U.S. refining capacity went from a record high of 18.98 million barrels per day at the start of 2020 to approximately 17.9 million by early 2022. The lowest level since 2014. It has continued declining since.
The Energy Information Administration said it plainly. “Typically, we don’t see capacity close and then reopen in the same operating mode, so we think it’s safe to say that the refineries that have closed are probably shuttered for good.”
These companies did not lose these refineries in a fire or a hurricane and never recover. They made a business decision. Demand dropped during COVID. Margins tightened. And instead of weathering the downturn and maintaining capacity for the recovery that everyone knew was coming, they permanently closed facilities, removed the capacity from the market forever, and waited.
When demand came roaring back in 2021 and 2022, the capacity was gone. Fewer refineries processing crude into fuel meant less supply of diesel and gasoline. Less supply meant higher prices. Higher prices meant wider margins. And wider margins meant the largest profits in the history of the refining industry.
The refining margin is called the crack spread. It is the difference between what a refiner pays for a barrel of crude oil and what they earn selling the refined products. From 2010 to 2021, the historical average crack spread was $10 to $16 per barrel. That was normal. That was steady. For over a decade.
In 2022, when the Russia-Ukraine war disrupted European fuel supply while U.S. refining capacity was still depleted from the closures, crack spreads exploded to $50 to $60 per barrel. Three to four times the historical norm.
In 2023 and 2024, spreads came down to $15 to $25. Closer to normal. Prices at the pump came down some. But they never went back to where they were before. The floor had been permanently raised.
Now in 2026, with the Iran war disrupting the Strait of Hormuz and Ukrainian drones hitting Russian refineries, crack spreads have surged past even the 2022 records. And the companies that removed the capacity are harvesting the consequences.
Marathon Petroleum, Valero Energy, and Phillips 66 collectively earned $12.6 billion in the second quarter of 2026 alone. Their highest combined quarterly result since 2022. Their stock prices are surging. Forbes reported in July that refining stocks are soaring as crack spreads hit record highs.
Marathon is the company that permanently closed its Martinez, California and Gallup, New Mexico refineries during COVID.
Phillips 66 is the company that closed its Alliance refinery in Louisiana after Hurricane Ida, closed its Rodeo and Santa Maria facilities in California, and closed its Los Angeles refinery in October 2025.
Valero is the company that ceased operations at its Benicia, California refinery in early 2026.
The same companies that removed the capacity are the same companies posting record profits from the scarcity that removal created.
And here is where it becomes something more than just a market story.
Before COVID, the oil and gas industry spent roughly $55 to $68 million per election cycle on political contributions to federal candidates and parties. That was the steady state for a decade. $56 million in 2018. $63 million in 2020.
In the 2024 election cycle, the oil and gas industry spent $219 million to influence the election. $67 million directly to candidates. $151 million in outside spending through PACs and super PACs. 88% of it went to Republicans.
From $63 million in 2020 to $219 million in 2024. A 247% increase in a single cycle.
Annual lobbying went from $112 million in 2020 to $154 million in 2024. The American Fuel and Petrochemical Manufacturers, the trade group that specifically represents refining companies, doubled its own lobbying budget from a $3.4 million annual average to $6.9 million starting in 2023, the same year its members were posting record profits from constrained supply.
The refiners’ trade group doubled its lobbying the same year the refiners posted their highest profits from the capacity they deliberately destroyed.
Valero tripled its political contributions from the 2022 cycle to the 2024 cycle. $1.78 million to $5.66 million. This is the same company that closed its Benicia refinery in early 2026, removing another 145,000 barrels per day, and posted billions in quarterly profits.
And what are those politicians doing with all that money and all that influence?
They are not investigating why diesel is at $6 when crude does not justify it. They are not holding hearings on refining margins. They are not asking why companies that permanently removed capacity are posting record profits from the scarcity they created. They are not proposing legislation to incentivize new refining capacity or to regulate crack spreads that are running 3 to 5 times their historical average.
They are doing nothing. Because the money has purchased their silence.
This is the story that neither side of the political argument wants you to see. Blaming Trump and the Iran war is convenient because it puts the problem on one man and one policy decision. Defending Trump by saying the war is necessary and prices will come down is convenient because it avoids examining who is actually profiting and why.
The truth is bigger than either argument.
The war is the accelerant. It is not the cause.
The cause is structural. The refining industry used COVID as cover to permanently reduce capacity. Every crisis that has come since, Russia-Ukraine in 2022, the Iran war in 2026, hits American consumers harder than it should because the cushion was deliberately removed. The system has less margin for disruption. And every disruption generates larger profits for the companies that made the system more fragile by design.
Then those profits get recycled into political spending. $219 million in the 2024 cycle. $154 million in lobbying in a single year. That money buys silence. It buys inaction. It buys the absence of hearings, the absence of investigations, the absence of regulation. And the cycle repeats.
Close the refineries. Tighten the supply. Wait for the next crisis. Harvest the margins. Post record profits. Spend record amounts on politicians. Protect the arrangement. Let the American consumer absorb the cost.
That is not a free market. That is a captured market. And the capture was paid for with profits extracted from the people now paying $6.05 per gallon to drive to work, feed their families, and heat their homes.
Diesel is the lifeblood of the American economy. It powers every truck that delivers every product to every shelf in every store you walk into. It powers the farm equipment that grows your food. It powers the construction equipment that builds your roads and your buildings. It powers the generators that keep your hospitals running when the grid fails. When diesel goes up, everything goes up. Groceries. Shipping. Heating. Construction. Manufacturing. Every cost that touches transportation, and in America that is nearly every cost, has diesel underneath it.
Fuel accounts for 15% to 30% of the total cost of food, according to the Independent Grocers Alliance. When diesel goes from $3.70 to $6.05 in one year, that is not a minor fluctuation. That is a structural shock to the cost of living for every American family.
And the people who engineered the conditions that make that shock possible are posting $12.6 billion in quarterly profits and spending $219 million to make sure the politicians you elected never ask them a single question about it.
The next time someone tells you diesel is expensive because of Trump, ask them why crude is below its inflation-adjusted highs from 2008 and 1980 but diesel is higher than it has ever been in history. Ask them what happened to the 11 refineries that closed since 2020. Ask them what a crack spread is and why it is running 3 to 5 times its historical average. Ask them how much Marathon, Valero, and Phillips 66 made last quarter. Ask them how much the oil and gas industry spent on the 2024 election.
And the next time someone tells you prices will come down when the war ends, ask them why prices never came back down after the Russia-Ukraine disruption faded in 2023. Ask them why the refining capacity that was removed during COVID was never rebuilt. Ask them why every subsequent crisis hits harder than it should.
The answer to both questions is the same.
The system is working exactly as designed. It is just not designed for you.
It is designed for the companies that post record profits every time a crisis creates scarcity. And for the politicians who take their money and look the other way while you pay for it at the pump, at the grocery store, and at your front door every time a package arrives.
$6.05 per gallon.
$12.6 billion in quarterly profits.
$219 million in political spending.
That is not an accident. That is an arrangement.
And you are paying for all of it.
Canada hasn’t built an oil refinery since the ’70’s. This is an issue.
@Grant McVicar. Respectfully, one could argue that building a refinery is a risky proposition for investors. You need a huge outlay of cash and regulatory approvals. You have to hope an energy transition to non fossil fuels won’t affect sales. The profit margins in the refinery business aren’t great either. Sure you have a point about monopolistic behaviour in some parts of the oil industry, but I don’t think refineries are the problem.
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yes there have been supply disruptions globally due to the war, but the real cause of diesel shortage in us is not the war. North america has more than enough crude to meets its needs. The issue is caused by lack of refinery capacity, as industry has shuttered refinerys over the last 10+years. Refineries are operating at 97+ capacity. It is an industry strategy to restrict product supply in order to keep consumer costs up and to take advantage of any product supply shortages occuring due to outages. Industry calls it capital dicipline, but it is really a classic economy of market failure, as there too few players in the market whch is not controled by an ologopoly.
If he did command the military to eliminate Iran’s leadership, it would do their people, and everyone else, a colossal favour.
Trump likes to think he is the ultimate authority on anything to do with money. He is but a brain fart blowing in the wind. He should probably stay focused on one of his newest ideas – annihilating Iran. The brilliance of that idea is breath taking.
As a western Canadian, I relish the thought of the hardship this would cause for the liberal voter base in Ontario and Quebec.
There are just too many erroneous statements in this story. Ariel Rabinovitch, you can do better.
“Oil and gas prices are mostly set globally…” NO, gas prices are NOT set globally. Oil, yes (it is a commodity), but not gasoline or diesel.
And then we have that banger of a quote from Kenneth Medlock III, a supposed Fellow in Energy and Resource Economics at the Baker Institue for Public Policy: “..no market participant in any market sells product at a loss.” Holy Jesus, get out of here man. Many producers sell product at a known loss. It’s cvalled retention of market share. For example, many dimensional lumber producers (especially Canadian companies like Canfor) are doing it this very minute.
Maybe Canada should put an export ban on oil to the USA. Trump is always saying that the USA has lots of oil but that’s only because we sell them our oil at a discount to the States. They should be the ones to suffer as they are the reason for all these problems. We should also build bypasses to be able to send oil to the east of Canada without it going through the States. The USA is now our least favored customer and will be for the foreseeable future.
@ben 354pm. Where did you get your libby economic education? You are a troll with no intelligence and probably chinese . Nobody believes a word
Country that has world 4th largest oil reserves we have to import gas and diesel from abroad .Thanks to liberals and green policies refineries are not built decades. Enjoy high prices!
Donald can’t plan more than a day in advance. No plan to end the war he started and is losing. No plan to slow the inflation he created.
Canada imports 3.55 million barrels of diesel PER DAY! Mainly Quebec and Ontario who are against Alberta pipelines. Ha! That would virtually shut down their trucking industry.
We will not become EU Members.
We will not be a US state.
We will not tolerate those that do not share our values.
We will remove politicians that do not put Canada first.
Why would the USA cut diesel production if there is a demand for all the diesel that the US refineries produce? The author is just trying to make a silly argument why the USA would never cut production.
There is no amount of censorship that will save Liberals from their fate.
2 points… Diesel is presently at over $2.85 per liter locally.
And compare gallons to gallons, or liters to liters. 2.85/l = $11.44/gallon (approx). 6.51/gallon is cheap compared to Canada.
Ben, you seem to think products hit shelves in Canada with rainbow propulsion.
If diesel prices rise, the US can withstand it more than Canada.
You go to a bank and tell them you want to bring aluminium can manufacturing back to Canada and see how they laugh you out of their offices.
How many Liberal brownshirts are here? One is too many.
Gas expert – lmfao.
Go for it trump…..and destroy your country….silly little fool!!!
In the short term, if the ban is applied to Canada, diesel prices would rise in some regions. In the USA, diesel prices will fall in some regions, but may rise in others. In the long term though, the USA in all regions will wind up paying the world price. Really this is a desperate move though and very risky, likely to bring more uncertainty which investors don’t like.
@Anonymous the only issue is it would take somebody with a big set to actually cut off all exports to the US, but we have a PM without any. Cave-in Carney just keeps talking but not producing anything. Not that he should have signed the deal from the minimal info that’s been released.
The real issue is cutting off the US would likely bankrupt half the Canadian-based businesses as well as half of the households out there. Yes the market would eventually stabilize, but not before the majority of Canadians go broke. Imagine diesel at $5/litre, gas at $4, and a 50% further increase on groceries……
Moron Trumpty knows he cant win the war he started, so now he’s going to screw American businesses
@Anonymous
That is what he wants us to do, so he can declare that we are hostile and then justify his annexation dreams.
If Trump follows through on this maybe it’s time Canada bans all shipments of hydro, oil, potash and any other product that the US needs (despite what Trump thinks he doesn’t need from Canada) Blackouts in the US would be very bad. Two can play his game if it is really necessary.