CNBC: US diesel export ban could send European fuel prices soaring

A potential US ban on diesel fuel exports could trigger a sharp rise in diesel prices across Europe.

Benedict George, head of European pricing at British analytics firm Argus Media, told CNBC by telephone that US restrictions on diesel exports could push European prices “to a new unprecedented level,” given that roughly half of the diesel supplied to Europe in recent months has come from the United States.

“It’s really important to be clear that there is no measure yet and it’s very unclear whether there will be a measure at all and what the measure will be even if there is a vision,” George said.

At the same time, CNBC noted that most oil traders in Europe doubt Washington will take such a step, as an export ban would pose a serious challenge to US oil companies.

George also pointed to the possibility that any restrictions could be limited in scope and duration.

“We don’t know if the U.S. will introduce any restrictions, but I think all anybody has talked about is a short-term measure, so two or three months at an absolute most … so there is a kind of time horizon on the U.S. restriction of exports, if it were to happen,” he added.

The possibility of such restrictions has been raised by US President Donald Trump, who said on September 22 that he supported stopping US diesel exports, arguing that the country produces substantial amounts of diesel and should keep more of the fuel domestically. 

Trump indicated on September 27 that he was considering an export ban “very seriously,” while acknowledging that such a move could also push up gasoline prices and adding, “We may do it.”

By Jeyhun Aghazada