US Diesel Export Ban Talk Widens Crude Futures Discount
The US crude futures discount to the global Brent benchmark has widened due to talk of a possible export ban on diesel. This could be a double-edged omen, bringing immediate relief to high domestic diesel prices but potentially leading to higher gasoline prices in the future and rising diesel prices again in the long term.
US refiners may cut their crude runs by as much as 12% if diesel exports are banned, according to analysts. The US is the world's largest diesel exporter, with net exports of about 1.2 million barrels per day versus production of 5.1 million bpd.
The White House denied reports it was preparing for a 90-day diesel export ban, but President Donald Trump said he backed such a measure. In the meantime, US Energy Secretary Chris Wright has contacted executives at major American refiners to gauge support for voluntary restraint on diesel exports.