U.S. President Donald Trump has raised the possibility of prohibiting diesel exports to enhance gas prices for Americans. However, experts caution that such a move could exacerbate the already strained global market, leading to a surge in diesel prices in Canada and other regions.
In a meeting with Ukrainian President Volodymyr Zelenskyy at the UN General Assembly, Trump mentioned his suggestion to halt diesel exports, citing the potential impact on regular gasoline prices. Treasury Secretary Scott Bessent stated that Washington is evaluating the feasibility and effectiveness of a complete or partial ban.
Despite reports suggesting a 90-day ban on diesel exports, a White House official denied active preparations for such a measure, and Energy Secretary Chris Wright clarified that a total ban is not under consideration. The proposal comes at a time of historically high diesel prices driven by geopolitical tensions in Iran and Ukraine.
Experts warn that a U.S. ban on diesel exports could disrupt the global market significantly. Joe Calnan, a vice president of energy at the Canadian Global Affairs Institute, criticized the idea as misguided, emphasizing the potential for price hikes across various regions if U.S. diesel is withdrawn from the market.
The U.S. currently exports approximately 1.5 million barrels of diesel per day, mainly to Latin America and Western Europe. A sudden removal of this supply could lead to widespread price increases. European markets, in particular, are vulnerable as their reliance on U.S. diesel exports has spiked to 50% in September from a 30% average in 2025, according to a report by Wood Mackenzie, an analytics group based in the UK.
Impact on Canada:
The ripple effect of a global price surge would affect Canada, worsening existing challenges, according to Calnan. Diesel plays a crucial role in powering transportation and agricultural machinery in Canada. With the ongoing harvest season, farmers are already feeling the impact of rising diesel prices, with reports of significant cost increases for fueling agricultural equipment.
Moreover, diesel is essential for power generation in Canada’s northern regions and for home heating in the Maritimes. Any potential hike in diesel prices could have far-reaching consequences for consumers in these areas. Despite this, experts believe that Canada, which exports more diesel than it imports, could manage without U.S. exports, although pricing dynamics would be altered.
Factors Driving Record-high Prices:
Geopolitical tensions, such as the conflict with Iran and disruptions in key supply routes like the Strait of Hormuz and Bab el-Mandeb Strait, are major contributors to the surge in diesel prices. Russia’s extended ban on diesel exports amid the conflict with Ukraine further adds to supply constraints, impacting global refining capacity.
The reduction in refining capacity due to conflicts has led to a significant supply shortfall, affecting global prices. The resultant increase in diesel prices has far-reaching implications for various sectors worldwide. Although temporarily aiding American gas prices, experts caution that a U.S. export ban could lead to unintended consequences, affecting production levels and ultimately impacting gasoline prices for consumers.
