Goldman: a diesel export ban would cut US diesel 25 cents a gallon a week — then lift gasoline 30 cents a week

President Donald Trump said Sunday he is looking “very seriously” at banning US diesel exports to tame record fuel prices — and Goldman Sachs has now published the math on the trade-off. Each week of a ban would knock about 25 cents a gallon off American diesel prices while storage tanks hold, the bank's analysts wrote in a Sept. 26 note. But once storage fills, the same ban would crush refining margins and add about 30 cents a gallon a week to US gasoline prices.

The first-order effect: about 25 cents off diesel a week

Goldman's starting point is the simplest one: stop shipping diesel abroad and the barrels have to go somewhere — into American storage tanks, and then into American trucks. As long as storage capacity remains available, each week of an export ban would reduce average US retail diesel prices by about 25 cents a gallon, the bank estimated — just under 4% off the current level of roughly $6.50 a gallon. The context is a market already at extremes: US diesel hit a record $6.528 a gallon this week, according to Reuters, and stood at $6.514 on Thursday in AAA data, while Platts assessed US Gulf Coast export diesel at a record of around $4.78 a gallon on Sept. 16. Goldman called restrictions on exports, including quotas, a “plausible” outcome — but stressed the scenario is not its base case.

The chain: why trapped diesel becomes expensive gasoline

Here is the catch the bank keeps coming back to. Diesel, gasoline and jet fuel are largely produced together in the same refining process, so a ban cannot simply bottle up diesel and leave everything else alone. “The longer a diesel export ban lasts, the more disruptive it would likely be by putting upward pressure on gasoline prices because diesel, gasoline, and jet fuel are largely produced together,” the analysts wrote. The mechanism runs through storage: once diesel tanks are full, falling diesel prices squeeze refining margins, and refiners respond the way they always do — by processing less crude. Goldman estimates that once storage is full, each week of a ban would add about $0.30 a gallon of upward pressure to US retail gasoline prices. The market is already pricing in that sequence: investors bracing for stranded diesel pushed West Texas Intermediate futures as much as $12.02 a barrel below Brent on Thursday — the widest discount since May 6, according to LSEG data — a signal they expect US refiners to run less crude. Wood Mackenzie's version of the same math is even starker: a ban would redirect a 700,000-barrel-a-day oversupply of diesel and gasoil into storage, filling Gulf Coast inventories to maximum capacity in just over a month and forcing refiners to cut crude runs by more than 2 million barrels a day — about 12% of current throughput.

Europe pays from day one

Across the Atlantic there is no first-order relief at all. Goldman estimates each week of a US ban would raise European wholesale diesel prices by $3 a barrel — just under 2% — with releases from European strategic diesel reserves offsetting only about half of that. The exposure is straightforward, and it is a function of scale. American refiners produce about 5.1 million barrels of diesel a day and ship roughly 1.2 million of them abroad on a net basis, per Morgan Stanley — a bigger export book than any other country's. Weekly shipments surged to a record near 2 million barrels a day last month. Those barrels have been plugging gaps left by lost Middle East supply — the Strait of Hormuz remains largely closed — and by Russia, which has repeatedly banned its own diesel exports after Ukrainian drone attacks on its refineries. On trading positioning, Goldman recommends buying European gasoline, noting gasoline markets are tightening rapidly and Europe's gasoline strategic reserves are four times smaller than its diesel reserves. And the bank warns the damage outlasts the policy: once a ban is lifted, US diesel prices would reconnect with prices elsewhere, lifting American prices and easing them abroad — but global refined-product prices would likely end up higher than in a world with neither a ban nor the resulting fall in US refinery output.

Washington is arguing with itself

The idea has ricocheted around the administration all week. Trump first backed restricting diesel exports on Tuesday. On Wednesday, Energy Secretary Chris Wright called a blanket ban a “blunt tool” that “definitely doesn't work,” warning it could force US refiners to cut production and push up gasoline and jet fuel prices — and the White House said it was not preparing a reported 90-day export ban. Instead, Wright has been contacting executives at several major refiners to gauge support for “voluntary restraint” on diesel exports, according to three people familiar with the discussions. Sunday's comments were a revival, not a decision: Trump told a Fox News reporter at the Presidents Cup final near Chicago, “That can oftentimes lead to a little bit of an increase on gasoline for cars, so we're looking at it very seriously — we may do it.” His own caveat mirrors Goldman's arithmetic. Meanwhile National Economic Council Director Kevin Hassett, Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer have spent the week analyzing the ramifications of a potential short-term ban, and farm-state lawmakers have pressed for curbs during the fall harvest as record prices feed voter anxiety ahead of November's midterms. Industry opposition is organized: more than 30 business, energy and manufacturing groups — including the American Petroleum Institute, the American Fuel and Petrochemical Manufacturers, the US Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers — urged Trump in a letter to reject export restrictions. The Chamber warned even a temporary ban could cascade across energy markets and jeopardize gasoline and jet fuel supplies; API president Mike Sommers noted the US supplies roughly 1.5 million of the roughly 8 million barrels of diesel traded globally by sea — “remove nearly 20% of that supply and global prices could rise.” Interior Secretary Doug Burgum has said the administration would consider a ban “if we thought that actually might lower prices, but that's not the case.” The industry's preferred alternative is suspending the federal diesel excise tax, though Bloomberg reports internal debate about how to waive it with the House in a pre-election recess — and some companies are already writing contractual protections for the possibility that a pause on diesel shipments prevents deliveries to foreign buyers.

What would decide it

Three things determine whether this stays talk. The first is what Bessent's feasibility review and the Hassett-led analysis actually produce — and whether a middle path like export quotas, which Goldman treats as the “plausible” outcome, emerges as the compromise between Trump's instinct and Wright's voluntary approach. The second is storage: how fast diesel inventories build and how close Gulf Coast tanks get to maximum capacity is the tripwire between the 25-cent relief phase and the 30-cent gasoline phase. The third is politics: fall harvest demand, record pump prices, and the November midterms are compressing the timeline — but any ban would also leave allies, including Brazil and the UK, scrambling for fuel, and would hand market share to foreign competitors, exactly the trade-offs the industry letter warns about.