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By Shane Croucher
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Mindful of the pain record-high diesel prices are causing across the U.S. right now, Senator Chuck Grassley, a Republican farmer from the agricultural state of Iowa, reached for a Nixon-era precedent. Depth of political memory is in the gift of a 93-year-old lawmaker.
Urging President Donald Trump to impose a temporary embargo on diesel exports by executive action, Grassley reminded the Senate that Richard Nixon "did it for the consumers of America, when he put embargoes on soybeans."
Farm economists remember that embargo a little differently. To them it was the moment a vital customer, Japan, went looking for another supplier, and found Brazil—now the chief rival of Iowa’s own soybean growers.
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The same day, at the United Nations, Trump said he had called for a ban inside his administration: "I've said let's not send out the diesel."
Treasury Secretary Scott Bessent said officials were weighing feasibility, given refining capacity, and which form, full or partial, might work. As of Wednesday, no order has been issued.
Diesel averaged a record $6.53 a gallon on Tuesday, according to AAA, up from $3.69 a year earlier, spiking in large part due to the Russia-Ukraine and Iran wars.
That’s hitting hard in rural areas currently harvesting, in freight businesses, among Americans who drive heavier vehicles like SUVs, and many others.
The appeal of a diesel export ban is intuitive. America produces more diesel than it burns, so why not keep the surplus at home and drive prices down?
But that diesel surplus is concentrated on the Gulf Coast, where refineries depend on an export outlet they can’t simply swap for customers in every corner of their own country.
Close it, and the likeliest result is not cheaper diesel everywhere, but fewer refinery runs—and, potentially, less gasoline. The opposite outcome of what an export ban intends to achieve.
Trump himself acknowledged that an export ban "could have a little bit of an effect on regular automobile gasoline," so "it’s a balance."
The numbers show why. In early September, U.S. refineries were running at nearly 98 percent of capacity and producing about 5.3 million barrels of distillate a day, while the country used about 3.7 million, according to the Energy Information Administration (EIA).
Most of the difference is exported, some 1.6 million barrels a day in August, according to Kpler data, up from about 1 million before the Iran war.
The EIA describes the Gulf Coast as "a region where more fuel is produced than consumed," with relatively little pipeline capacity to the West Coast.
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The American Petroleum Institute, which opposes a ban, says "geography and infrastructure" keep much of that surplus from markets that need it.
Washington has already loosened one constraint; the Jones Act’s domestic-shipping rules have been waived since March. But the deeper limit is demand. Americans are not about to burn 40 percent more diesel because it got cheaper in Houston.
And refiners, Kenneth Medlock III of Rice University’s Baker Institute told Reuters, do not sell fuel at a loss, they cut runs. "While an export ban might have a very short-term impact that lowers price, it would not be long-lived," Medlock said.
Output mixes can be tweaked, but a barrel of crude typically yields 19 to 20 gallons of gasoline alongside 11 to 13 of distillate, the EIA says, so fewer runs mean less gasoline and jet fuel—and, analysts warn, higher prices for both.
The relief would also be lopsided, likely deepest near Gulf Coast refineries and thinnest, or even negative, on the coasts that import fuel at world prices.
Analysts expect a ban to push those prices higher, and Russia, usually the second-largest diesel exporter after the U.S., has barred diesel exports since July.
Trump’s own interior secretary, Doug Burgum, has cautioned that trading partners could retaliate against import-reliant states such as California.
"We would consider an export ban if we thought that actually might lower prices, but that's not the case," Burgum said at a G20 meeting on energy in Houston.
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But Grassley and others supporting a ban are watching the inflationary impact these high diesel prices are having, and reaching for a tool they know could work in the short-term at least.
Democratic staff on the Congressional Joint Economic Committee estimated that farmers spent $1.4 billion more on diesel this planting season than last, and harvest brings another heavy cost. Truckers’ fuel bills end up in grocery prices.
The shock was also forecast to fade. The EIA’s September outlook, issued, to be clear, before the latest spike, sees diesel averaging $4.40 a gallon in 2027, so a pause could, in principle, bridge the worst months.
Medlock concedes that a ban might briefly lower prices, and for a farmer filling a tank in October, temporary relief is still relief. Grassley’s answer to the refiners is to sell diesel more cheaply at home than abroad.
Whether refiners would oblige that request depends on the policy’s design. A blanket ban would maximize both the domestic glut and the foreign backlash.
But a partial one, like an export license regime, a volume cap, or a trigger tied to domestic inventories, each with a hard end date—might shore up stocks without collapsing the market that refiners sell into. Bessent has a lot to think about.
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If a restriction is ordered by the Trump administration and Gulf Coast refinery runs hold near current highs, gasoline does not climb faster than crude, and diesel falls on the East Coast as well as in Texas, the skeptics—this analysis included—will have been wrong.
Nixon’s soybean embargo, imposed on June 27, 1973, was over by October 1. But Japan, which relied on American farmers for 90 percent of its soybeans, began doubting the U.S. as a supplier and poured development money into Brazil’s Cerrado savanna.
In 2013, Brazil overtook the U.S. in soybean shipments. The risk is that a diesel ban, even a temporary one, would have the same long-term effect.
Four years ago, the Biden White House studied a fuel-export ban amid the early months of the Russia-Ukraine war. It didn’t impose one, and then watched the market rebalance itself.
Relief for farmers, who feed the nation, is a worthy aim. But a diesel fix that may help for weeks and cost for decades still needs some heavy refining.
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