Diesel Export Ban Talks Resurface as Futures Swing 25 Cents; JPMorgan Sees No Clear Resolution

Discussions of a potential U.S. diesel export ban are gaining political traction, but analysts warn the policy would create uneven regional outcomes and likely trigger refinery run cuts rather than broad price relief, according to FreightWaves energy reporter John Kingston. Diesel futures moved through a 25-cent range in a single session, a swing Kingston attributed partly to President Trump's remarks at the United Nations about potentially "annihilating" Iran, the world's fourth- or fifth-largest oil producer. "Talk of annihilating the world's 4th or 5th largest oil producer is always going to be bullish," Kingston said. The U.S. has not banned any commodity export since lifting its crude oil ban in 2015. A diesel export ban would tighten European supply — New England depends on European imports — while the Colonial Pipeline from the Gulf Coast to New York Harbor is likely already at full capacity. The West Coast cannot easily receive Gulf Coast diesel without transiting the Panama Canal, and tanker rates are "off the charts," Kingston said. JPMorgan's commodity research team said last week it sees no resolution to elevated energy prices, a notable admission after $100 Brent, $4 gasoline and a 5-handle on the 10-year Treasury yield failed to shift administration policy. Refiners running at maximum capacity would cut runs if export markets close, reducing diesel, gasoline, jet fuel and heating oil supplies simultaneously.