Nicolai Haugsted
Trump’s attempt to tackle record diesel prices sparks warnings from inside his own administration.
Trump faces revolt inside his own team over drastic plan to bring diesel prices down
Donald Trump has a fuel-price problem with the midterm elections rapidly approaching, and pressure to find a quick solution is getting harder for the White House to ignore.
Diesel has climbed above $6.50 per gallon nationally, squeezing farmers, truckers and businesses that depend heavily on the fuel. Political pressure has followed, particularly from Republicans worried about taking those prices into November.
One possible remedy has now caused a rather spectacular disagreement inside Trump’s own orbit.
Politico reported Wednesday that the administration was moving toward a 90-day halt on US diesel exports. People familiar with the discussions described resistance from senior officials and the energy industry, while one Trump energy adviser offered a particularly uncomplicated assessment.
“It’s a terrible idea,” the adviser told Politico.
The White House says the reported plan does not exist.
Trump’s team cannot agree on the medicine
According to Politico’s reporting, five people familiar with internal discussions said the administration had been considering temporarily keeping American diesel at home rather than shipping it overseas.
Trump himself had publicly expressed support for the concept Tuesday as prices continued climbing.
Energy Secretary Chris Wright has a very different opinion.
“The blunt tool of banning diesel exports definitely doesn’t work,” Wright said Wednesday at an event in New York.
His objection comes down to how American refineries actually operate.
Refineries do not conveniently manufacture diesel in isolation. Production also generates gasoline and jet fuel, meaning restrictions on exporting one product could eventually force refiners to cut overall output.
“If you can’t export the diesel that comes out of our refineries, you run out of places to store it, and you have to reduce US refining, which would put upward pressure on gasoline prices and jet fuel prices,” Wright said.
Put differently, a policy designed to make one fuel cheaper could risk making other fuels more expensive.
Adviser calls the idea ‘terrible’
Internal resistance reportedly stretches beyond Wright.
Politico reported that Treasury Secretary Scott Bessent and Interior Secretary Doug Burgum had also objected to a full ban.
“It’s a terrible idea,” an unnamed Trump energy adviser told the outlet, while cautioning that discussions remained fluid.
“There’s a lot of swirl so it might change.”
According to the same report, Wright called energy executives Tuesday night to warn that restrictions could arrive within days. Several executives subsequently contacted the White House to voice their objections.
Political considerations appear to be colliding with those economic warnings as the November elections approach.
“That camp has been swept aside by the political camp, which says, ‘dammit, something has to happen,'” an oil industry executive who had spoken with senior White House officials told Politico.
Another person familiar with the talks described Bessent as willing to argue his case internally before falling into line with the eventual decision.
“Bessent is a good soldier,” the person said. “He will voice opinions and then march forward.”
$6.52 diesel gives Republicans a headache
The urgency is easy to find at America’s gas stations.
AAA recorded the national diesel average at $6.52 per gallon on September 23. Prices were roughly $5.61 one month earlier and $3.69 a year ago.
September 22 produced a national record of $6.5276, according to AAA.
Wars involving Iran and Ukraine have disrupted international oil and fuel supplies, helping push diesel prices sharply higher.
Republicans representing farming communities have consequently started demanding action.
Senator Chuck Grassley and several GOP lawmakers have called for restrictions on diesel exports, arguing that farmers and other Americans should receive priority over foreign customers while domestic prices remain so high.
Vulnerable Republicans have also raised concerns that fuel costs could hurt the party at the midterms.
Wright fears the cure could hurt more
America is a major diesel exporter, which makes the proposed solution considerably more complicated than simply closing a valve.
Europe relies heavily on American supplies, while restricting exports could disrupt global markets and potentially reduce the incentive for US refiners to maintain current production levels.
Wright therefore favors alternatives.
“We are open to any ideas to lower energy prices for Americans. We have a continual, thoughtful dialog based on the facts on the ground of what are the most practical steps moving forward, and it looks like right now we do need to grow the diesel supply in the United States.”
Asked specifically about stopping exports, Wright sounded considerably more definitive.
“We will not cease exports of U.S. diesel,” he said.
White House says the story is fake
Any impression that the administration had already settled on a 90-day ban did not survive the afternoon.
A White House official rejected Politico’s report outright.
“This is another fake news story from Politico,” the official said.
Reuters subsequently reported the denial and quoted Wright saying that “nobody is considering a flat ban” on diesel exports.
“What’s being discussed is what’s the most efficient way to get more diesel into the United States of America, and continue maximum flows of gasoline and jet fuel,” Wright said.
Markets nevertheless noticed the drama.
US ultra-low-sulfur diesel futures dropped about 4% after Politico’s report before the White House denial followed.
Whether the final answer involves export restrictions, voluntary changes by refiners or something else, the political clock is becoming part of the calculation.
Trump wants cheaper diesel before voters head to the polls. His own energy secretary is warning that one of the most politically tempting shortcuts could leave Americans paying more somewhere else.
