President Donald Trump’s push to ban American diesel exports sent European prices for the fuel surging, while US futures came under pressure.
With flows from the region’s top supplier at risk, European diesel’s premium to Brent crude jumped to more than $95 a barrel on Wednesday, a record in Bloomberg data going back to 2011. Known as crack spread, the indicator has been keenly watched by central bankers as they seek to tame inflation. The equivalent measure in the US, meanwhile, weakened.
Trump’s threat comes as Europe is already grappling with the loss of diesel shipments from the Middle East, and Russian export curbs have tightened the global fuel market further. The US has become Europe’s main overseas supplier, with American exports of the workhorse fuel surging to a weekly record near 2 million barrels a day last month.
While the Middle East conflict has brought flows of petroleum products through the Strait of Hormuz down to a trickle, Moscow is set to extend a ban on most diesel exports beyond the end of this month as Ukraine continues to pummel Russia’s oil refineries.
The wars have pushed up fuel prices faster than crude, stoking inflation on both sides of the Atlantic. In the US, rising prices at the pump have become a major source of frustration ahead of midterm elections.
Trump said he’s encouraged his advisers to support a ban on US diesel exports. Treasury Secretary Scott Bessent said officials are looking at whether a full or partial ban would work.
A key US oil industry group cautioned against the move, saying it could lower American fuel production and damage the global economy.