Posted on 09/22/2026 5:37:59 AM PDT by Miami Rebel
Senate Republicans are clashing over a proposal endorsed by Sen. Chuck Grassley (Iowa) and other farm-state Republicans to embargo the export of diesel to increase supply and lower prices at home, something U.S. leaders last implemented during the 1970s energy crisis.
Senate Majority Leader John Thune (R-S.D.) is open to the idea, but oil-state Republicans have slammed the proposal as a “gimmick.” The soaring cost of diesel is putting political pressure on Republicans in farm states such as Iowa, Kansas and Nebraska, where Democrats now have a chance to win Senate seats that weren’t viewed as competitive a year ago.
The double whammy of President Trump’s global trade war, which has impacted commodities such as pork and soybeans, and the mounting cost of fuel and fertilizer has put farmers in a foul mood, and some Senate Republicans fear an angry backlash in key red states. “Why doesn’t Pres Trump put an embargo on diesel exports like presidents in the 70s put embargoes on ag[riculture] products bc [because] food prices were inflated,” Grassley posted on social media over the weekend. “High diesel prices ARE KILLING FARMERS INCOME,” he declared.
Rep. Ashley Hinson (R-Iowa), who is neck and neck with her Democratic opponent Josh Turek in the polls, endorsed an embargo on diesel exports Monday and blamed Trump’s months-long war with Iran for pushing up fuel prices.
“Iowans are being squeezed and shouldn’t have to foot the bill at the pump or the checkout line for the war in Iran. We need to use every option at our disposal to provide some relief from high prices,” Hinson posted Monday on social platform X. She called for suspending the gas tax, pausing diesel exports and loosening restrictions on gas with higher blends of ethanol. Thune said he’s open to the idea of limiting diesel exports, an echo of the mid 1970s when the Ford and Carter administrations halted most crude oil exports to stabilize prices in response to the oil shock created by the oil embargo imposed against the United States by members of OPEC.
“The export ban, honestly, makes probably more sense to me. I think that suspending the [gas] tax is a short-term thing and then you create holes in the Highway Trust Fund,” he said. But Republicans from oil-producing states are pushing back hard on the proposed diesel export ban, which could depress prices for producers based in their home states.
“It’s a gimmick,” said Sen. John Cornyn (R-Texas), who represents the biggest oil-producing state in the nation. Mike Sommers, the president and CEO of the American Petroleum Institute, warned that pausing the export of diesel would “make the problem worse” because it would lead to a glut of supply in Gulf Coast states and could make costs rise in other parts of the country because of imbalances in the broader oil market. “Americans are hurting from rising diesel prices, and policymakers are understandably searching for answers. But restricting U.S. diesel exports would make the problem worse, not better — for consumers, farmers and the broader U.S. economy,” Sommers posted on X.
“Most U.S. diesel production is concentrated on the Gulf Coast, which produces more fuel than the region can consume. Meanwhile, other parts of the country rely on imports because of geography and infrastructure constraints,” he said. Sen. Lisa Murkowski (R-Alaska) was cool to the idea of an oil export ban when asked about the idea early last week. Murkowski sounded more receptive to the idea later in the week but expressed concern that shutting down oil exports might not “move the needle.”
“We actually produce more than we consume here, produce more diesel in this country than we consume,” she said. “We’re talking about global supply, so I worry that we do something in the short-term … that doesn’t really move the needle. “It sounds interesting and intriguing as, ‘OK, what are we going to do if we’re facing high prices?” she added. Murkowski played a role in lifting the 1970s-era oil export ban more than 10 years ago.
“We have seen the prices of fuel and related products — diesel, other refined products, fertilizer — we’ve seen all that rise as a consequence of what we’re seeing in Iran,” she said. Residents of Alaska are now spending more than $3,000 annually per capita on diesel and home heating oil, more than residents of any other state in the country. The United States had an oil export ban in place for 40 years, from 1975 to 2015, and then lifted it after domestic oil production boomed because technological advances enabled U.S. companies to extract oil from shale reserves more efficiently.
The lifting of the export ban was supported at the time from now-Sens. Cynthia Lummis (R-Wyo.) and Kevin Cramer (R-N.D.). Other Republicans argue it would make more sense to pursue other options, such as reopening two large refineries in California. “I’d want to see how they would do it,” Sen. Mike Rounds (R-S.D.) said of a potential ban on oil exports. “The bigger problem we’ve got right now is, as I understand it, in California we’ve already lost two more refineries because of California’s strict environmental rules,” he said. “They’ve shut down two more refineries. I would like to get those back up and operational again.
“That might very well help a lot of our domestic needs right here in the United States. It seems to me that refining is going to be a bigger issue here than a lot of people thought.” Barrasso warned that banning diesel exports is a complex issue given the interconnected web of economic transactions across the United States. He argued that high diesel prices would be temporary because of the conflict with Iran.
“What we do in Wyoming, you know, we import diesel from Canada. We refine it and then send it back. So the president will consider a number of things,” he said. “What we need to do is when the war is over, prices are going to come down and stay down significantly,” Barrasso predicted.
National average diesel prices hit an all-time high Monday, reaching $6.51 cents per gallon. Diesel cost $3.52 a gallon on average before the United States and Israel launched strikes against Iran, which led to a months-long conflict that has dramatically slowed oil shipments through the Persian Gulf.
This isn’t just about the mullahs, bert.
Of course it is.
Everything now is the result of the mullahs.
The deep state is arguing over a condition resulting from the war with Iran
And Europe, Ukraine, Russia, China, et al play no role at all...?
The government need not be involved in setting the price. The sellers all know what the domestic market price should be
NOBODY knows what prices 'should be'. Prices are constantly discovered by buyers and sellers.
You wrote, "Domestic sales are priced at the cost + overhead and profit within the 50 states as normal commerce," but that isn't how market prices are determined. Prices are a function of supply and demand.
Market prices are not 'cost plus'. Prices can be below cost, which is a signal to producers and investors to reduce production. Prices can also be well above cost, and the profit size is a signal to producers and investors to increase production.
Trying to regiment prices around costs is not what markets do, and completely misses the point of prices in a market economy. Prices are the distillation of innumerable aspects of valuation. They represent information. Trying to set prices on a 'cost plus' basis ignores the fundamental role prices play in coordinating production and consumption based on true fundamentals.
I checked gas prices this morning. Diesel prices are touching $7 in central Illinois. Regular is back $5. Evidently there was a refinery that went offline in the Chicago area for about a week or so. This is right in the middle of harvest season..
I think you would find that any Hamas links to Iran are loose at best. Hamas' leadership has historically been Sunni, not Shi'ite, which might explain why Israel was so comfortable in allowing outside funding to flow to the "terriorist army" for years.
You have an extremely narrow and totally incorrect view of the present.
Really? LOL. "Extremely narrow" is how I'd describe the views of people in the dying echo chambers like this very website.
Russia is a huge exporter of diesel fuel. Ukraine is blowing up Russian refineries. This probably has just as much if not more of an effect on the overall world supply of diesel.
Add to that refineries closing in California due them not wanting to spend one billion upgrading that refinery.
The USA produces MORE diesel than our domestic market consumes. Those exports primarily come from LA & TX. They do not have as much on the price delivered to the Pacific coast of the USA or New England or even the Upper mid west.
That is because the diesel fuel in those areas typically comes from other refineries.
The diesel issue is a world wide problem. The conflict with Iran is just one factor contributing to the current price increases.
The problem is NIMBY. No one wants a brand new refinery built upwind from their house or their water supply. Just like they don’t want a nuclear power plant upwind from them.
This is as close to absurd as it gets. The rest of the arguments against an export ban are the same old money and politics graft and corruption scheme as usual.
“Mike Sommers, the president and CEO of the American Petroleum Institute, warned that pausing the export of diesel would “make the problem worse” because it would lead to a glut of supply in Gulf Coast states and could make costs rise in other parts of the country because of imbalances in the broader oil market. “Americans are hurting from rising diesel prices, and policymakers are understandably searching for answers. But restricting U.S. diesel exports would make the problem worse, not better — for consumers, farmers and the broader U.S. economy,” Sommers posted on X. “
Codswallop! We have product pipelines that move product all over the nation. If that is a problem then temporarily suspend the Jones Act for product transport.
You see the price of OUR US diesel fuel? You know how that affects OUR US prices of everything? Do you realize we’re in a war? I can just imagine your thinking during WW2.
Cutting through the free traders and the we are going to lose the midterms crew..and many good questions and a large number of it does not work that ways....let me contribute some numbers and an answer to exporting 10x more from TX than we import into the NE.
The numbers.....DIESEL
Category Volume
Production 5.3 million b/d
Domestic Demand 3.6 million b/d
Exports 1.25 million b/d
Imports 144,000 b/d
Net Exports 1.1 million b/d
The imports come into NE, the exports ship out of TX.
Solution seems simple, eh.....ban exports, lower internal prices and crisis averted......except it does not work like that unless we further fiddle with the markets.
There is never an end to fiddling.
There is no pipeline to get diesel to NE.....
-Ships (1-3 cents/gal depending on distance (dod))
12-36 cents/gal to get it where needed.
Trains (3 or 4 cents/gal dod),
36-45 cents/gal dod to get it where it needs to go
Trucks (5-6 cents/gal dod)
54-67 cents/gal dod to get it where it needs to go.
These incremental costs would ONLY be for the diesel that needs moved from surplus TX to needy NE.
This is simplistic, because you could get import diesel in NE cheaper than these double handled TX gallons....so what are we doing?
Well, dumping an additional 1.1mm gals into a 3.6mm domestic market...would cause domestic prices to plummet to an unknown level....at least to me....AND global prices will skyrocket...so, better idea in this heavy hand of govt scenario would be to sell the surplus and divert the needed 144k gallons (4% of domestic need).....domestic prices would drop and global prices would rise, but to much lesser amounts.
So now what? The producers are getting screwed (unless the govt steps in to subsidize them to past profit levels)...and they may build capacity increase production to access the now much more lucrative export market as well if they knew the govt would not welch on them and pull the plugs leaving them with an even larger over production.
Get’s complicated real fast.....while the free market guys say do not screw with it....even if a couple million Irish starve!
Had to get that in.
Before the games begin, let’s look at where the $6.29+/- retail costs comes from.
Component $/Gallon % of Total
Crude Oil $2.74 43.6% Set by market
Refining $1.32 21.0% Some margin here, probly?
Distr&Mrktg $1.02 16.2%
Federal Tax $0.244 3.9%
State Tax (avg) $0.359 5.7%
Local Tax (avg) $0.05 0.8%
Station Margin $0.28 4.4% Will vary as well
Retail Price $6.29 100%
It gets dizzying......MY suggestion?
Give the truckers an income tax rebate bringing prices back to a pre-war level?....about $3.50 for diesel. This means a $2.73/gal rebate.
A cool $151 billion a year. A bargain to shut the truckers up and have them voting MAGA for awhile?
You want to do that rebate for the gasoline buyer, too?
Sure, WTF.....we spend $1trln more a year than we take in anyway.
Joe Commuter?...and you could restrict the rebate to work
Daily gallons used
Commuting/work ~112 million gallons ~30%
Personal/Pleasure ~262 million gallons ~70%
Total Daily Use ~374 million gallons 100%
Gasoline was $3.08 in Jan 2025 and now $4.06....so $1/gal for work would be $41Bn a year..
...the price of 2 new Ford Carriers all in with planes and crew.
Worth it?
What would ensure the future of the United States better? 2 new carriers or Democrats continuing in a minority role.
Trump has the votes in the House and Senate to get this rebate done......before the election.
He offered $5k per person.....taxpayer or not....at a total one time cost of $1.3 trillion!
This is conditional on MAGA control of House/Senate.....
A promised made to be broken if there ever was one.
Me? The truckers are noisy. The Drivers are noisy....pay them off with a rebate and shut them up until market prices drop.
If the Trump $5k is real, step it down by an equal amount.
Thoughts?
I am tired and probably will not respond no matter how ugly, stupid and number of furries I am accused of buggering.
I just wanted to fuel the fiery debate with some fun facts.
Jesus-Mercy-Peace
I got sidetracked by a couple of projects as I prepared this and note now I mixed gallons in barrels in a very small part of it, but I think a calculations were OK so I’m not gonna have time to tell tomorrow to verify that.
MAybe greater brains THAN MINE Can do that. The real question is, a rebate would seem better than diverting barrels.
I got sidetracked by a couple of projects as I prepared this and note now I mixed gallons in barrels in a very small part of it, but I think a calculations were OK so I’m not gonna have time to tell tomorrow to verify that.
MAybe greater brains THAN MINE Can do that. The real question is, a rebate would seem better than diverting barrels.
I got sidetracked by a couple of projects as I prepared this and note now I mixed gallons in barrels in a very small part of it, but I think a calculations were OK so I’m not gonna have time to tell tomorrow to verify that.
MAybe greater brains THAN MINE Can do that. The real question is, a rebate would seem better than diverting barrels.
I got sidetracked by a couple of projects as I prepared this and note now I mixed gallons in barrels in a very small part of it, but I think a calculations were OK so I’m not gonna have time to tell tomorrow to verify that.
MAybe greater brains THAN MINE Can do that. The real question is, a rebate would seem better than diverting barrels.
You can say that again.
What is it with the repeating of posts on FR ?
I think we had a 6X post the other day.
yet, the person said they only hit the POST once.
You are correct when you say most of the diesel sold here in Northern New England come from JD Irvings refinery across the gulf of Maine in New Brunswick. I believe that is the largest refinery in Canada and probably the NE.
2. Are prices with capped quantities built into these contracts?
3. Would a Class I railroad be legitimately applying a fuel surcharge to a customer’s invoice for higher fuel costs incurred by other carriers in a delivery chain (drayage truckers, shortline or switching railroads, etc.)?
In principle I agree with not interfering with free markets, however, I don’t know if that principle is worth economic and political suicide.
In any event, we have a comfortable export margin if diesel products. Roughly 25% of our production is exported. Therefor, we don’t need to ban exports, we just need to limit them so as to provide a domestic supply strong enough to bring prices back down to, say, their level in January, 2026.
A crude (sorry for the pun) way to do this might be to start off with an allowance of 15% of our production to be exported. That gives us a nominal surplus of 10%, or, in other words, a supply of 110% of Jan. 2026, insulated from global pricing. If that results in retail prices dropping below the Jan. 2026 level, immediately adjust to 20%. Rinse and repeat.
The oil companies, refiners, etc., were all doing ok in Jan. 2026, so, I don’t think any majors are exactly going to go out of business, plus they should make INCREASED profits overseas, at least for a while, because this policy will cause somewhat of a price bump outside the US, at least in in countries that are net importers. Sorry, dudes and dudettes. Maybe you need to send some frigates and planes to the Middle East.
BTW, I saw on Fox News this morning, an interesting development: It went by quickly, but may be pretty consequential depending on if it pans out: The UK is going to provide RAF support to Saudi Arabia?
A caveat is that we do not as of yet know what that support entails. The UK has done a lot to castrate its military over the last 2 decades. That leaves a lot of questions, such as whether the UK’s support can be tactically decisive? I suspect not, but maybe that is the wrong question. The better question, perhaps, is whether this will lead other consumers of Gulf States’ petroleum products, or, for that matter, most anyone affected by the spike in prices, to get involved. How far can that go? And if several other countries get involved, will Trump then be willing to do more?
“The UK has done a lot to castrate its military over the last 2 decades.”
UK has invested 2.7% of its GDP in its military consistently for decades.
BTW, yes, we should reopen those CA refineries, but, those do not produce enough product to have much effect on the global market. If it dropped average US prices by 10 cents, I’d be very surprised.
Note that lower prices in the US will raise US consumption a bit, which is why I did not suggest immediately heading to “export only 25% of our production”.
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