Diesel just hit $6.52/gal. Politico says the White House is preparing a 90-day export ban. But what will that actually accomplish? It's a good question, since this has never been done before, so here's a very brief breakdown:
IN THE SHORT TERM
- Gulf Coast & Midwest diesel prices drop slightly.
- East & West Coast prices likely to rise (East Coast imports ~10% of its diesel & Gulf pipelines are already near capacity).
- Gas & jet fuel (along with airline prices) will climb quickly as refiners cut output.
- Global diesel prices will spike, hitting Mexico, Brazil, Chile & Europe, affecting US imports.
IN THE LONG TERM
- Discounted surplus will cause producers to cut output, leading diesel prices to rise again regardless.
- US diesel still tracks the world price & the ban pushes that price even higher, causing a vicious cycle.
- Inflation will surely continue to rise.
- Foreign buyers lock in other suppliers & the US is likely to permanently lose export share.
All in all, just a horrific idea, specifically geared towards delivering a very minimal drop in fuel costs in time for the midterms, and at the expense of long-term thinking. Par for the course for the Slop Administration.