Trump backs a diesel export ban and says a decision is coming fast; Valero falls 4.1%

President Trump said on Tuesday he has argued inside his administration for banning U.S. diesel exports, and that a decision would come quickly "one way or another," CNBC reported. "I've said let's not send out the diesel. We make a lot of diesel," he told reporters at the United Nations. The Financial Times, the Wall Street Journal, MarketWatch and Axios all reported that Trump backs a ban.

Treasury Secretary Scott Bessent said the administration is "examining whether it's feasible in terms of the overall refining capacity and whether a full or partial ban would work."

That is a shift. Scripps News had reported the White House saying no export ban was planned, and Republicans in Congress are split on the idea, as we reported in our morning story on the export numbers.

Refiners took the hit

Refiners have been the big winners from record diesel prices, and their shares fell as the ban talk grew. Bloomberg had reported earlier that a rally in refining stocks stalled as the idea spread. At Tuesday's close, according to Nasdaq data:

The reason is the spread. CNBC put diesel at about $207 a barrel on Tuesday, more than $100 above crude. U.S. crude (WTI) was trading near $93 late in the day. Our arithmetic: that is a gap of roughly $114 a barrel, or about $2.70 a gallon, between what a refiner pays for crude and what diesel fetches on the market. Exports let refiners sell into a world market that is short of diesel after attacks on Russian and Middle East refineries and threats to tankers in the Strait of Hormuz. A ban would push those barrels back into the U.S. market, where extra supply would mean lower prices for refiners.

How big the redirected supply could be

The Energy Information Administration's latest weekly data, for the week to September 11, shows the U.S. exporting 1.614 million barrels a day of distillate fuel, while Americans used 3.501 million barrels a day. So exports equal about 46% of domestic consumption. That is why ban supporters think it could move the pump price, which AAA puts at a record $6.53 a gallon nationally and $8.44 in California, according to CNBC.

What a ban cannot do is create new diesel. Refiners could respond by making less of it, and trading partners that rely on U.S. fuel could retaliate. Interior Secretary Doug Burgum has told CNBC he was "not at all confident" a ban would lower prices. Bessent's mention of a "partial" ban suggests the administration is weighing something short of a full cutoff, but no details were given.

Who it hits

If a ban happens and works, the gainers are diesel buyers: farms at harvest, trucking firms, and anyone pricing freight into a bid. We worked through the cost of record diesel by trade in our Main Street piece. If it does not happen, the wide gap between crude and diesel stays in place, and that gap is what Tuesday's sell-off put in doubt. The next EIA weekly inventory report comes out Wednesday. See our crude oil chart.

Sources: CNBC; Bloomberg; Scripps News; Financial Times, WSJ, MarketWatch and Axios headlines; EIA weekly petroleum data; Nasdaq. Spread figures are our calculations. This is market information, not investment advice.