US Diesel Export Ban Risks Widening WTI Discount to Brent

The US is considering a ban on diesel exports, which could widen the discount of West Texas Intermediate (WTI) crude compared to Brent. According to Reuters, this policy debate comes as shipping costs surge and global supply routes tighten, adding another layer of uncertainty for refiners, traders, and motorists.

US refineries may cut processing by 12% if diesel remains in the country, while storage facilities could fill up quickly. Analysts estimate that an export ban would send a surplus of 700,000 barrels per day of diesel and gasoil into storage, with inventories on the Gulf Coast reaching capacity in just over a month.

The US is the world's largest diesel exporter, producing about 5.1 million barrels per day while exporting around 1.2 million barrels per day. Morgan Stanley estimates that if exports were banned, US refineries would have to cut crude processing by more than 2 million barrels per day to prevent storage facilities from overflowing.

The White House has denied media reports of a 90-day ban, but President Donald Trump has voiced support for the idea. US Energy Secretary Chris Wright is speaking with executives from major US refineries about finding an alternative to a short-term ban.