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.
Ah, that refinery outage is affecting more than IL — nearby state too. :-(
It’d be better to limit some exports, see how the market reacts, and readjust the limits. See my post above.
Direct price controls would not only be even MORE socialist, they’d almost certainly be just as disastrous as in the past.
Nixon, in most ways outside of Watergate, was a VERY smart guy, and even he botched that one royally. (Which he later, to his credit, admitted.)
Let ‘em tell you to pound sand. They are likely to do worse elsewhere, as they’ll be behind the curve as prices rise.
FR has been buggy at times the last few days.
By volume, the Russian refineries’ damage appears to PRESENTLY be about the same (shortfall).
However, Ukraine also hammered over 200 ships in Russia’s “shadow fleet”. That affects both crude and refined products, of course.
1. I have no idea. I do not work for any railroads. I only base my statements on what I have been told over 41 years as a broker. So, I would ASSume they buy as much in advance to be able to lock in their profits. However, IF they think the price is high and going to be lower in the future they MAY not HEDGE all of their future needs.
2. ALL FUTURES contracts are for specific quantities shipped in a month in the future. Meaning they are buying #2 Commercial diesel in X amount of gallons delivered to the Port of NYC the month of June 2027(as an example).
Go to the CME or the NYME websites. I think diesel trades on the NYME. Agricultural products(like lumber and pork bellies) trade on the CME.
3. No, we receive a bill from the BNSF or the CN, UP, NS, CSXT, CPRS. Only for the portion of the freight that they haul including the switch to the final destination. The Switching Carriers get paid by the line haul carries as part of their agreement to move the cars around a local city. For example, the KO moves cars across Wichita. Customers served by the KO are open to switch with the UP or BNSF. The KO gets paid a standard amount per car to move it across the city. Same with the MNNR in the Twin Cities. Or any of the other short line carriers. They call this being open to reciprical switching. Anything not in the cities switching district is considered a LINE HAUL.
If the railcar is hauled by multiple Class I carriers then we will receive a bill from multiple railroads. For example, the last rail car I sold went from Bingen, WA on the BNSF to Henrietta, NY on the LAL. The leat expensive routing is through Chicago. The BNSF rate on a 73’ A Frame Flat car is $10316 plus a $.45 fuel surcharge per mile($1047). For a total of $11363. The CSXT rate is $3613. Plus a $.44/mile fuel surcharge for a total of $3870. The short line carrier(the LAL) is paid by the CSXT to bring it to its final destination just SE of Rochester, NY.
So, roughly 19% of the cost of the lumber is the freight to get it to its final destination. 8% of that $15234 freight bill is the current FUEL SURCHARGE.
“Let ‘em tell you to pound sand. They are likely to do worse elsewhere, as they’ll be behind the curve as prices rise.”
I would not have any customers then.
As a lumber trader I am only as good as my word.
My word is a contractual bond.
As is my customers.
My industry does not use recorded lines.
We do send Purchase Orders and Order Confirmations.
Many privately owned business only use a verbal PO.
Typically the owner or GM of the business is responsible
for purchasing.
Where did you get that figure? A quick sampling:
2016: 2.21% (by NATO’s definition, which is more generous than most other sources)
2024: 2.3% (NATO report)
2025: 2.4% (NATO report)
In any event, actual capability, outside of nukes, has gone into the toilet. The recent debacle where the UK struggled mightily to get a single missile defense destroyer to Cyprus (the other 5 of their top type were all laid up with bigger problems), and then a few days later it was back in port due to “problems”, was almost Monty Python worthy. Or should I bring up the UK’s ability (lack of) to provide, essentially, substantial “trip wire” forces / “peace monitor troops” for Ukraine?
“states”!
You misunderstand: I would advise my customers of my price including delivery cost - best projection I can make, and let them know that is the case. Then stick with it. If they don’t like it, they can hunt around elsewhere, and in this environment, they’ll be behind the curve & likely pay more to someone else. They’ll learn. ;-)
I would never suggest going back on your (or my) word.
If your projection is too low, that’s on you, and yes, I’ve been in (basically) that position (I bid too low on labor to get projects, and ended up working for under minimum wage, but I did get a great reputation of going above and beyond and putting in whatever hours were needed to make it all work — on time.)
Yes, I did misunderstand you. I thought you meant that just because the freight had gone up since we had taken the order we should ask the customer to pay more than we took the order at. Which, IF we did that, the customer WOULD tell us to lose my number and rightly so.
After the recent carnage in the Black Sea and Sea of Azov, not to mention the hits in the ME, I’d think there would certainly be a lot of ship owners looking for safer areas to transport oil and refined products...
Does the opinion of high ranking UK DOD officials count?
https://www.theglobalstatistics.com/defence-spending-statistics-in-uk/
Right. Now we’re on the same page. :-)
They got it back on line from what I’ve read, but it was down for over a week because of electricity feed problems to the plant.
I think my post describing a two tier domestic diesel pricing was not interpreted as I intended.
By establishing a two tier pricing system for the American domestic market and the export market, the American producers will them selves separate the two.
The American producers will establish the domestic price independent of the market in the rest of the world. Any company can just announce we are selling diesel to American customers at a price reduced from that we sell the products to the export market. As soon as one major producer makes that decision, the others will follow.
There need be no government involvement beyond thanks to American companies for thinking of their American customers
Same.
One button pound.....multi posts.
I also note some of my replies will show up in Forum as stand-alones...that is like the were atory posts.
Jim R may have been more critical to day-day than was anticipated.
FR is an early 1990’s era self-designed/programmed/maintained website.
The patches are probably more code now than the original compilation.
Thankful to have it.
Still my most visited site.
ditto
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