America Exports Spare Diesel as Pump Prices Hit Records

U.S. diesel posted a national diesel average of $6.48 a gallon on Saturday, Sept. 26, four cents under the Sept. 22 record of $6.53. Refineries still make far more of the fuel than American farms, fleets and school buses burn.

The spare barrels leave the country anyway, sold into a war-tight world market that now sets the harvest-week pump. Farm-state Republicans want those exports stopped. Energy Secretary Chris Wright and Gulf Coast refiners say a ban would shrink output of diesel, gasoline and jet fuel from the same crude stream.

America Makes More Diesel Than It Burns

For the week ended Sept. 18, U.S. plants turned out 5.2 million barrels a day of distillate, the Energy Information Administration’s weekly petroleum report shows, while the four-week average of distillate product supplied, the agency’s stand-in for domestic use, was 3.6 million barrels a day. That is a 1.6 million barrel-a-day gap between what the system makes and what the country burns.

Steve Hanke, a Johns Hopkins economist, put the same split in blunter terms on Friday.

The US produces 5.3 million barrels of distillates daily against domestic demand of only 3.6 million.

Steve Hanke, professor of applied economics, Johns Hopkins University

The EIA weekly print is 5.2 million barrels a day of production, not 5.3, against the same 3.6 million barrels a day of use. Either way, the United States is not short of diesel in the sense of a plant that cannot cover its own market. Distillate imports that week averaged only 85,000 barrels a day.

THE LATEST EIA DISTILLATE PRINT

Stocks still look tight because the extra barrels do not stay in U.S. tanks. Distillate inventories fell 0.4 million barrels that week and stood 12% below the five-year average. Ultra-low sulfur diesel stocks, the grade sold at the pump, were 96.4 million barrels. In its Sept. 9 Short-Term Energy Outlook, EIA said it expected distillate inventories to fall below 100 million barrels in September and to remain under the five-year low through the end of 2026 and most of 2027, with net exports near five-year highs in every month of 2026 since February.

$6.48 a Gallon in the Middle of Harvest

AAA’s Saturday reading of $6.48 followed Friday’s $6.50. The all-time high remains $6.53 on Tuesday, Sept. 22. A year earlier the national average was $3.68, a 76% jump. A month earlier it was $5.62, a 15% rise in 30 days.

THE AAA PUMP BOARD AROUND THE RECORD

• Year earlier: Diesel averaged $3.68 a gallon, so the Saturday print is $2.80 higher.
• Month earlier: Diesel averaged $5.62 a gallon before the September spike.
• Regular gasoline: The Saturday national average was $4.49 a gallon, still below diesel.
• EIA 2026 forecast: The agency’s September outlook still has retail diesel averaging $5.07 for the full year, well under the current pump.

That timing is brutal for farms. EIA notes that distillate production typically falls in the autumn maintenance season while harvest demand rises. Marty Gray, who runs Gray Farms in Watseka, Illinois, said he thinks about diesel when he wakes up, the trucks, the grain elevator, and whether to fill tanks now or wait. Andrew Coppin, chief executive of Ranchbot, a firm that sells remote monitors for water pumps, said that outside labor, diesel is the single biggest input on a lot of operations, and that a Ford F-250, Ram 2500 or Chevy Silverado in one-ton diesel trim gets 12 miles a gallon on a good day.

Why a Surplus Nation Pays Record Prices

Global distillate is scarce, so U.S. barrels fetch a world price even when domestic plants run a surplus. EIA says tightness abroad raises global distillate prices and pulls U.S. exports higher. The American Petroleum Institute, the refiners’ trade group, says the United States supplies about 1.5 million of the 8 million barrels of diesel moved by sea each day, about 20 percent of seaborne diesel.

The hole in the keep-it-home argument is that U.S. plants are already covering domestic use and then some. What they cannot do is replace barrels that used to come from Russia and the Persian Gulf. The Institute for Energy Research, citing the International Energy Agency, said net diesel exports from those two regions in August were 1.6 million barrels a day lower than in February, when the two regions accounted for almost 45% of diesel traded by sea.

WHAT TOOK THE BARRELS OFF THE WATER

• The Iran war: Fighting that began in late February has disrupted the Strait of Hormuz, a passage for a large share of global oil and fuel.
• Russian plants: Ukraine has hit Russian refineries through 2026, and Moscow banned diesel exports on July 9 to protect its own market.
• U.S. fall maintenance: Seasonal cutbacks in distillate output arrive just as farms pull more fuel for harvest.
• Export pull: EIA says U.S. net distillate exports have been at or near five-year highs every month since February.

Refiners do not run a diesel-only machine. The same crude run makes gasoline and jet fuel. When the world will pay more for diesel than the Midwest will, Gulf Coast plants keep making it and ship the extra. That is why a country that produces 1.6 million barrels a day more distillate than it uses can still watch the green handle hit $6.53.

Keep the Surplus Home, Farm States Say

President Donald Trump said on Tuesday, Sept. 22, that he backed keeping diesel here, telling reporters he had called for not sending the fuel out. Sen. Chuck Grassley of Iowa had already framed the choice as farm income versus oil companies, and on Wednesday he told the White House not to take the industry’s word that a ban would fail.

I hope WH doesnt listen 2 Big Oil who claim diesel export ban wont work Big Oil doesnt need 2 charge sky-high diesel prices 4 Iowa farmers + truckers just filling up They shld cut price 4 US diesel&get the $$ frm other countries IF U CAN EMBARGO CHIPS U CAN EMBARGO DIESEL

— Chuck Grassley (@ChuckGrassley) September 23, 2026

Grassley wrote that Big Oil does not need to charge “sky-high diesel prices” for Iowa farmers and truckers, and that “IF U CAN EMBARGO CHIPS U CAN EMBARGO DIESEL.” Rep. Ashley Hinson, also of Iowa, called for suspending diesel exports and the federal gas tax. Louisiana Gov. Jeff Landry, whose state hosts a large refining and export industry, posted in favor of a 90-day ban. Sen. Dan Sullivan of Alaska asked for a temporary pause to rebuild reserves before winter. Rep. Tim Burchett of Tennessee introduced bills that would restrict exports through January 2027 or whenever the national average hits $5 a gallon.

Wright has been the brake. He said the “blunt tool of banning diesel exports definitely doesn’t work,” and that the same plant that makes diesel also makes gasoline and jet fuel, so barrels with nowhere to go fill storage and force lower U.S. refining. On Wednesday he said the United States “will not cease exports of US diesel,” though flows out of U.S. plants might be tweaked. Sen. Ted Cruz of Texas told refining executives late Friday that the White House had offered assurances it would not ban diesel exports, according to people in that conversation. Sen. John Cornyn of Texas has called the idea “a gimmick.”

WHAT WE KNOW

• Trump’s stance: On Sept. 22 he said he favored not sending diesel abroad.
• Wright’s stance: He has rejected a blunt ban and has sounded out refiners on voluntary restraint.
• Industry line: API and more than 30 business and energy groups asked the White House to reject export limits, saying Gulf plants need a foreign outlet for surplus diesel.

WHAT IS UNCONFIRMED

• A 90-day ban: Reports of a prepared 90-day halt have been denied, then walked back, then denied again. No order has been issued.
• Voluntary cuts: Wright has called executives. Terms, if any, have not been published.
• Friday’s assurance: Cruz described a White House message to refiners. The president has not put that in writing.

The political split is geographic. Farm states want barrels parked in the Midwest before harvest finishes. Gulf refiners want the export dock, because that is how they keep crude runs high. An embargo would be a government export control from the same coalition that backed the Iran war that took Russian and Gulf diesel off the market.

Gulf Coast Tanks Would Fill in a Month

Wood Mackenzie analysts said a ban would redirect about 700,000 barrels a day of surplus diesel and gasoil into storage and fill Gulf Coast tanks in just over a month. They estimated U.S. refiners would then cut crude runs by more than 2 million barrels a day, about 12% of current rates, to keep inventories from overflowing.

API president and CEO Mike Sommers said Americans are hurting from diesel costs tied to a disruption in global refining, and that restricting U.S. energy exports would compound the problem and hurt consumers. Gulf Coast plants, he said, make more diesel than the region uses, and pipes and geography cannot simply slide that surplus into every U.S. market that wants it. Exports are the outlet that lets those plants keep running hard.

Oxford Economics, in a note, said a ban would lower prices for a time, with the relief uneven. Price drops would cluster on the Gulf Coast and in the Midwest, where most refining sits. Distillate shortages are worse in the Northeast and on the West Coast, which would see little help. For the week ended Sept. 18, U.S. refineries processed 16.8 million barrels a day of crude, down 519,000 barrels a day from the week before, at 94.0% of capacity. There is not a large idle fleet waiting to spin up if exports stop. If tanks fill, runs fall, and gasoline and jet fuel fall with diesel.

School Buses and a Food Bank’s Lost Meals

The pump number shows up in places that do not export a gallon. Kenneth Hill, supply chain officer at the Atlanta Community Food Bank, said an extra $100,000 on diesel this year is about 122,000 meals the bank will not buy. Georgia diesel averaged $6.32 a gallon on Friday, up from $3.54 a year earlier.

Cherry Creek Schools in Colorado runs more than 300 buses for about 24,000 students. Mark Ingram, the district’s transportation director, said diesel will cost an extra $500,000 this year and push the fuel budget to about $2 million, against $1.5 million originally planned. The district is looking at combining routes and cutting some activity trips. Colorado diesel averaged $6.16 a gallon on Friday, up from $3.51 a year earlier. George Dempsey, who owns Raptor Roll Offs, a Denver-area dumpster firm, said he is holding prices as long as he can and cannot absorb the whole increase, so the cost will trickle to customers.

WHERE THE GALLON LANDS LOCALLY

Those local bills feed the inflation print. The Bureau of Labor Statistics said the all-items index increased 3.4 percent over the 12 months ending in August, matching July. Energy was up 16.3% over the year and 2.1% in August. Gasoline, all types, was up 27.4% over the year and 3.9% in August, accounting for over one third of the monthly all-items rise. Fuel oil, the heating cousin of diesel, was up 52.0% over the year. Core prices, all items less food and energy, rose 2.4%. Food was up 2.7%, and food away from home was up 3.4%.

Bernard Yaros, lead U.S. economist at Oxford Economics, wrote that higher diesel and freight costs risk bleeding into core inflation by raising the cost of making and moving consumer goods, with grocery items, restaurants and delivery the most exposed. Gregory Daco, chief economist at EY-Parthenon, has said inflation could reach 3.6% by year-end on the fuel spike. August’s 3.4% already includes a gasoline jump that is smaller than diesel’s. The harvest and heating season still sit ahead of the next CPI releases.

Winter Heat Will Draw From the Same Tanks

EIA’s September outlook warned that low distillate stocks may also lift residential heating oil in the Northeast as production dips in the fall and winter demand rises. Ultra-low sulfur diesel and heating oil share the distillate pool. A Gulf Coast surplus that leaves as exports does not automatically refill New England tanks. Oxford’s regional split on a ban, help on the Gulf and in the Midwest, little help on the coasts, is the same map as the heating-oil problem.

Wright’s voluntary-restraint talks and Cruz’s Friday message leave the export dock open for now. Plants are still making 5.2 million barrels a day of distillate and sending the extra into a market that lost about 1.6 million barrels a day from Russia and the Gulf. Gray is still staring at the same choice he named in Illinois, fill the tanks now or wait and see if the gallon gets cheaper or worse.