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Diesel export ban could backfire on gas prices, CEO says
TotalEnergies' Patrick Pouyanné says the proposal could reduce U.S. refinery output and affect gas prices
Such a ban also would affect Europe, which has been importing more U.S. diesel in recent months. (Brandon Bell/Getty Images)
Key Takeaways:
- TotalEnergies CEO Patrick Pouyanné said Sept. 28 that a proposed U.S. diesel export ban could reduce refinery output and raise domestic gasoline prices.
- U.S. diesel exports reached a weekly record of nearly 2 million barrels daily in August amid disrupted global fuel flows.
- TotalEnergies postponed French refinery maintenance until early next year, while Pouyanné said a ban could force European governments to tap strategic reserves.
A U.S. ban on diesel exports under consideration by President Donald Trump to combat high prices probably would backfire by affecting gasoline prices, the CEO of French oil major TotalEnergies SE said.
“It’s a bad idea,” CEO Patrick Pouyanné said during a meeting with investors in New York on Sept. 28. It could “oblige U.S. refineries to lower their throughput, and then it might impact the gasoline price in the U.S.”
Several farm-state lawmakers have urged Trump to limit U.S. diesel exports during the peak fall harvest season as global fuel markets reel from disrupted flows through the critical Strait of Hormuz and Ukrainian attacks on Russian refineries.
The U.S. has emerged as the world’s supplier of last resort, with diesel exports surging to a weekly record of nearly 2 million barrels a day in August.
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Pouyanné. (Nathan Laine/Bloomberg)
Such a ban also would affect Europe, which has been importing more U.S. diesel in recent months, and force governments to tap strategic reserves to curb prices, Pouyanné said.
While European refiners, including TotalEnergies, might benefit from higher diesel margins, he said the ban would accelerate demand destruction and heighten consumer backlash against oil companies.
TotalEnergies has capped gasoline and diesel prices at its French service stations in a bid to assuage politicians and motorists. On Sept. 28, the company postponed planned maintenance at a refinery in northwestern France until early next year to avoid further tightening the market in the next few months by taking production offline.
