Diesel hits record high of $6.51 per gallon; top Republican leaders collectively pressure the administration to ban exports—likelihood of implementation stands at just 35% amid intra-party divisions

Pressure within the Republican Party is intensifying sharply. As U.S. diesel prices surge to an all-time high, Republican lawmakers from agricultural states have publicly urged the Trump administration to ban diesel exports to alleviate fuel-cost pressures on farmers and truck drivers. On Monday, U.S. retail diesel prices climbed to a record peak of $6.51 per gallon—up more than 70% since February, before the outbreak of the Iran war. Senator Chuck Grassley of Iowa directly urged President Trump on the social media platform X to suspend diesel exports, writing in all capital letters: "HIGH DIESEL PRICES ARE KILLING FARM INCOME." Several Iowa House members followed suit the same day, calling on the White House to "stop the bleeding" through measures including an export ban, suspension of fuel taxes, and financial assistance to affected businesses. The White House has explicitly rejected this proposal. A White House official stated, "The administration is not currently considering export bans or export restrictions," citing Interior Secretary Doug Burgum’s position: while an export ban would be worth considering *if* it demonstrably lowered prices, "that is not the case." Energy consultancy Rapidan Energy forecasts a 35% probability that the White House will implement an export ban. Legislative action begins to take shape At the congressional level, calls for an export ban have escalated from individual statements into concrete legislative proposals. U.S. Representative Tim Burchett of Tennessee introduced two bills: one to immediately ban diesel exports until January 2027; the other to establish a price-trigger mechanism—automatically imposing an export ban whenever the national average diesel price exceeds $5.00 per gallon, lasting until the price falls below $4.50. Senate Majority Leader John Thune said last week he remains open to “exploring” an export ban, adding: "If we have sufficient domestic supply but are exporting, that could be one way to address the problem." Representative Ashley Hinson called for deploying "every available option," including suspending diesel exports and establishing a diesel relief program.

U.S. diesel crack spread surges past $106 per barrel—a new all-time high—posing a 'midterm election shock' for Trump

On September 1, the U.S. diesel crack spread—the refining margin between diesel and crude oil prices—surged past $106 per barrel, setting a new historical record. Meanwhile, retail diesel prices approached $5.63 per gallon. This energy crisis, triggered by the Iran war, is spreading across the entire economy—driving up inflation, depressing bond markets, dragging down equities—and, with less than two months remaining before the midterm elections, imposing mounting political pressure on the Trump administration. Soaring diesel prices directly impact agriculture, trucking, and winter heating demand—politically threatening the Republican Party’s core electoral base in red states. On September 1, President Trump urgently convened a meeting at the White House with major U.S. refiners—including Marathon Petroleum, Phillips 66, Chevron, Delek US Holdings, PBF Energy, and Valero Energy. According to sources cited by the Financial Times (UK), the meeting focused on expanding refining capacity and lowering fuel prices. Following the meeting, Trump posted on Truth Social, announcing environmental waivers for small refineries and demanding that companies expand output. Goldman Sachs subsequently raised its 2027 forecast for U.S. diesel crack spreads from $27 to $63 per barrel; its forecast for European refiners rose from $19 to $49 per barrel. As reported by Bloomberg, Goldman Sachs analysts wrote in their research note: "Ongoing disruptions to Middle Eastern and Russian refining capacity have further squeezed already-tight global refining capacity, pushing refined-product margins to successive new highs." The U.S. diesel crack spread—that is, the price differential between diesel and other refined products and crude oil—has breached $106 per barrel. Three simultaneous supply shocks make diesel the 'epicenter of the crisis' Soaring diesel prices stem from three concurrent breakdowns across the supply chain. First, the Iran war has effectively sealed off the Strait of Hormuz. Since late February—when the U.S. and Israel launched their first strikes against Iran—refined product exports from the Persian Gulf have fallen to roughly 40% of pre-war levels, while crude exports have dropped to only 70–80%. According to Bloomberg, the U.S. carried out another large-scale air strike against Iran on September 1; Iran’s Islamic Revolutionary Guard Corps responded by warning of "severe retaliation." Second, Russian refining capacity has clearly declined amid the ongoing Russia-Ukraine conflict. Third, Middle Eastern refineries have sustained damage. According to Goldman Sachs data, global refinery shutdowns currently exceed seasonal averages by 60%; the International Energy Agency estimates that Iranian attacks have taken nearly 3 million barrels per day of refining capacity offline. According to data from the American Petroleum Institute, overall global crude processing volumes have declined by approximately 5 million barrels per day compared to one year ago. Diesel sits squarely at the center of this price surge: since February, the global wholesale price of refined products has risen by $40 per barrel on average—with diesel accounting for over 40% of that increase. U.S. refiners operate at full capacity—but are nearing their limits In response to the supply shortfall, U.S. refiners are operating at historically high intensity. Per data from the U.S. Energy Information Administration, U.S. refinery utilization rates remained at 95% or higher for 12 consecutive weeks as of the week ending August 21—the longest such streak since 2000. Last week, utilization rose further to 97.4%. The American Petroleum Institute reports that U.S. diesel production in July reached a record high for that month.

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Trump Supports Diesel Export Ban as Fuel Prices Hit Records

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