US Diesel Export Ban Talk Triggers Global Oil Market Shake-Up

Talk of banning US diesel exports is sending shockwaves through global oil markets. The move could redirect up to 700,000 barrels a day of surplus diesel and gasoil into domestic storage, forcing refiners to cut crude throughput by around 12%.

The confusion surrounding the potential ban has already led to a wide discount between US crude futures and international Brent benchmark prices. West Texas Intermediate (WTI) is trading as much as $12 a barrel below Brent, its widest discount since early May.

The catalyst for this shift is the record-high diesel prices in the US. Prices touched $6.52 a gallon last week, prompting President Trump to suggest keeping diesel supplies domestic rather than exporting them abroad.