00:00Donald Trump has a diesel problem, and he may be willing to sacrifice America's long-term energy
00:04interests to get a political fix. To be clear, America isn't short of diesel. It exports about
00:101.5 million barrels a day. The problem is, diesel is a globally traded commodity, so the price gets
00:16set globally, and the world is short of diesel. Diesel prices in the U.S. have reached an all-time
00:21record of more than $6.50 a gallon. High diesel prices hurt Americans in a number of ways. Bad
00:27for farmers, it's bad for trucking, it stokes inflation. High diesel prices can also be
00:33readily blamed on the war in Iran, which is Trump's signature project of 2026. And the
00:38timing is bad, because midterms are imminent, and the polling for Republicans and Trump doesn't
00:44look good. An export ban would bottle diesel up inside the U.S., causing prices to drop,
00:49and that would give Trump a quick win. However, all sorts of pernicious longer-term effects
00:55would flow from it. First up, oil refiners are in the business of making money. So, if
01:00diesel doesn't make as much money, they will make less of it. And over time, the market
01:04will rebalance, and prices will go up again. It will also persuade them, perhaps, not to
01:09invest in new or upgraded refining capacity. Because why invest in that if you think the
01:14government might block you from exporting at some point down the line? It's bad for the
01:18outside world, because they're relying on U.S. exports. And if those get cut off, the price
01:24of diesel outside the U.S. will surge even higher. And it's bad for the whole project of
01:30the U.S. exporting its energy. The irony here is that Trump's energy dominance agenda rests
01:36on the idea of exporting more U.S. energy and using that as leverage in the wider world.
01:42It would be ironic, indeed, if the U.S. government, out of not dominance, but expedience, ends up
01:50blocking its own exports.
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