A U.S. diesel export ban could raise fuel costs abroad and eventually push American gasoline prices higher, Devere Group CEO Nigel Green warns. His Sept. 28 assessment comes as oil rises following President Donald Trump’s rejection of Iran’s Strait of Hormuz proposal.
Trump Diesel Curbs Could Hit Every Major Economy, Devere Warns
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Key Takeaways
- Green warns that export curbs could spread fuel costs across major economies.
- An oil industry group says a ban could reduce U.S. gasoline and diesel production.
- Europe’s latest inflation data already show a sharp rise in energy prices.
Why Green Sees a Risk Beyond U.S. Borders
Higher transport and production costs could reach households far beyond the countries buying American fuel if Washington restricts diesel exports. In a Sept. 28 warning about the proposed curbs, Nigel Green, CEO of Devere Group, an independent financial advisory organization, argued that a shortage abroad could spread through freight, farming, and industry. Green warned:
“Either way, every major economy on earth is exposed to the potential fallout.”
The warning followed President Donald Trump’s rejection of an Iranian proposal that could have reopened the Strait of Hormuz within about seven days under agreed conditions. The waterway is a major route for oil shipments. A Sept. 24 account of Iran’s proposal described the proposed easing of U.S. pressure and its blockade. No reopening agreement was reached.
Oil prices rose after the rejection, with Brent crude climbing above $108 a barrel in early trading Sept. 28. That added to an energy shock already visible earlier in the month: Brent had crossed $100 during a previous escalation involving Iran. Green’s warning concerns a further, conditional shock from U.S. export restrictions, rather than an effect of a ban already in place.
How an Export Ban Could Reach American Drivers
Keeping more diesel in the United States could increase domestic supply initially, but the oil industry warns that the effect may reverse. In a Sept. 22 statement opposing export restrictions, the American Petroleum Institute said Gulf Coast refineries produce more diesel than the region consumes. If they cannot export the surplus or move it readily to other U.S. markets, then they could process less crude oil and produce less gasoline and jet fuel alongside it.
Europe faces a more immediate risk from losing access to U.S. shipments. According to Eurostat’s final August figures, eurozone consumer prices rose 3.2% from a year earlier, while energy prices increased 14.3%. A further increase in imported fuel costs could add to that pressure.
The European Central Bank has already responded to persistent inflation. Its Sept. 10 rate decision raised key interest rates by a quarter-point and projected eurozone growth of 0.9% in 2026. The bank said the outlook remains highly uncertain, with upside risks to inflation and downside risks to growth.
Inflation Risk Builds Ahead of the Midterms
Fuel costs were feeding into U.S. business prices before the latest policy debate. August’s producer price index data showed a 24.1% monthly jump in diesel fuel prices, while truck freight prices rose 2%. Those figures help explain why a renewed rise in energy costs could affect goods well beyond the pump, though the eventual price paid by consumers would depend on how much the increase businesses pass along.
Green also raised the prospect of prolonged inflation changing assumptions about interest rates and investment returns. That risk does not establish how any particular asset would perform: bitcoin’s record during past inflation shocks has varied. The policy question remains unresolved: Trump voiced support for curbing exports Sept. 22, a day before a White House official denied a report that a 90-day ban was being prepared. The decision would come as the Nov. 3 midterm elections approach.
