US President Trump said on Tuesday that he supports a ban on US diesel exports to help lower prices. The government will make a decision “soon,” he said, “no matter which way” it takes. However, analysts say this measure could have the complete opposite effect. Gbenga Ajilore, chief economist at the Center for Budget and Policy Priorities, a Washington think tank, said, “The problem with the export ban is that it doesn't increase domestic supply; instead, it may reduce supply, leading to further price increases. The main factor driving up diesel prices is the war with Iran. After ending the war with Iran and reopening the Strait of Hormuz, diesel prices will drop. Any other solution will fail.” Bespoke Investment Group also pointed out that the ban may cause US Gulf Coast refineries to close due to lack of sufficient storage capacity. In other words, the export ban may reduce global diesel supply, thereby harming refiners' profits. Ipek Ozkardeskaya, a senior analyst at Swiss Baer Bank, said that currently the US is the world's largest exporter of diesel, and if the US restricts exports, global diesel prices may rise sharply. And since US refiners will lose some of their export markets, they may reduce production, which will eventually lead to a tightening of the supply of other fuels in the US.

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