The Iran war has sent diesel prices soaring around the world, straining national budgets, adding costs to businesses and snarling supply chains from farms to ports. Now President Trump is threatening to ban or restrict the export of diesel from the United States, which is the top supplier to more than a dozen countries including Mexico, Canada and much of Europe. Oil executives and world leaders are issuing increasingly dire warnings that the result could be global price spikes on everything from groceries to jet fuel.
"I've sent a very clear signal to my American counterpart and also the public, which is that it is not in the interest of anybody — not the U.S., not us — to not have as free a flow of energy as possible in these difficult times," Dan Jorgensen, the European Union's energy minister, said on Tuesday. Often called the workhorse fuel of the global economy, diesel is made from crude oil at refineries. It powers the heavy machinery, trucks, tractors and agricultural equipment crucial to heavy industry.
In the United States, retail diesel prices climbed this month to a record high of more than $6.50 per gallon — nearly 70 percent more than this time last year. That's put intense pressure on Mr. Trump and Republicans to find ways to lower costs, particularly before the midterm elections in November. Analysts are warning, nearly uniformly, that if the United States held back its diesel from the global market, the result would briefly lower prices for Americans, but rapidly hurt the rest of the world.
"This would be a tremendous shock and blow," Robert Mc Nally, president of Rapidan Energy Group, a research and consulting firm in Washington. "The rest of the world would have no choice but to absorb a huge price increase for diesel," he said. A U.S. export ban on diesel would be deeply damaging in Europe, which has become increasingly dependent on American fuel since the loss of supplies from Russia. Fatih Birol, head of the International Energy Agency, said Europe is "one of the most exposed regions, if not the most exposed one, when it comes to diesel."
Source: New York Times Top Stories · Summarized by HeadlinesBriefing