As U.S. diesel prices hit a record high, Trump has personally confirmed that an export ban is under serious consideration, and Goldman Sachs quickly modeled the transmission path once such a ban takes effect.

On Sunday, September 27, while attending the Presidents Cup golf event near Chicago, U.S. President Trump responded to ongoing rumors about a diesel export ban, saying he is giving "very serious" consideration to prohibiting U.S. diesel exports. He told reporters:

This sometimes leads to a small increase in car gasoline prices, so we are studying this very seriously — we may do it.

According to Bloomberg, National Economic Council Director Hassett, Treasury Secretary Bessent, and U.S. Trade Representative Greer have spent the past week analyzing the potential impact of a short-term diesel export ban, underscoring how seriously the government is treating the option.

Goldman Sachs research views this as a "very likely scenario, but not the base case." The bank modeled that the ban would pressure U.S. diesel prices lower in the short term (about $0.25 per gallon per week), but if it persists for 9 to 10 weeks until tanks fill up, it would then push gasoline prices higher (about $0.30 per gallon per week) while also driving up European diesel prices.

Why discuss a ban now?

The drivers behind a potential ban come from multiple directions:

First, record prices. The average U.S. retail diesel price has climbed to $6.5 per gallon, a record high. Shipping disruptions in the Strait of Hormuz have disrupted global fuel flows, and Ukrainian attacks on Russian refineries have further tightened supply. Against this backdrop, the United States has become the world's "supplier of last resort" for diesel.

Second, surging exports. According to Goldman Sachs research, U.S. net diesel exports have risen from 1.1 million barrels per day in 2025 to about 1.6 million barrels per day in recent months, with a single week last month approaching a record 2 million barrels per day. Record global diesel refining margins are encouraging refiners to keep expanding exports.

Third, pressure from lawmakers in agricultural states. Diesel is a core fuel for farm machinery, freight trains, trucks, and delivery vehicles. Several lawmakers from agricultural states have urged Trump to restrict diesel exports during the autumn harvest peak.

Goldman Sachs modeling: The ban is "very likely," possibly starting in October

Goldman Sachs analysts including Daan Struyven conducted a quantitative analysis of a hypothetical scenario in a September 26 research note titled "Modeling Potential U.S. Diesel Export Restrictions":

The ban begins in early October 2026 and lasts at least until December (the 90-day ban discussed in media reports).

The analysts noted this is a "very likely scenario, but not our base case."

Impact one: U.S. diesel prices fall in the short term

Goldman Sachs believes that in the early phase of the ban, U.S. diesel prices will face modest downward pressure.

Specifically, with tanks still having spare capacity, each week the ban continues will push the average U.S. retail diesel price down by about $0.25 per gallon, nearly 4% of the current $6.5 per gallon.

The logic chain is: export disruption → domestic inventory buildup → wholesale price pressure → retail price decline.

Impact two: The longer the ban, the more expensive gasoline becomes

This is the most noteworthy reverse effect in the bank's analysis.

Diesel, gasoline, and jet fuel are highly linked in the refining process, and the ability to switch output ratios is limited. Once diesel inventories approach tank capacity, refiners will be forced to cut run rates — reducing not only diesel output but also gasoline and jet fuel supply.

The bank estimates that once diesel tanks are full, each week the ban continues will create upward pressure of about $0.30 per gallon on U.S. retail gasoline prices.

Under Goldman Sachs's base assumption, with exports halted at 1.6 million barrels per day, U.S. national diesel tanks would fill within 9 to 10 weeks. But Goldman Sachs also noted that refiners would actually start cutting output before tanks are full, so upward pressure on gasoline prices would appear earlier than that.

Impact three: Diesel prices rise outside the United States

The shock of the ban will not stop at the U.S. border.

Europe and Latin America (Brazil, Mexico, etc.) are the main destinations for U.S. diesel exports. The bank estimates that each week the ban continues, European wholesale diesel (ARA diesel) prices will rise by about $3 per barrel, nearly 2%.

However, diesel held in Europe's strategic petroleum reserves (SPR) could offset about half of that price increase. As of the end of June, OECD European members still held 190 million barrels of strategic diesel reserves, equivalent to nearly 500 days of U.S. diesel imports.

Goldman Sachs also noted that the supply shock will quickly spread to Asia — because Latin America and Europe will turn to competing for diesel resources from countries such as India.

Impact four: U.S. diesel prices rebound after the ban is lifted

The price suppression from the ban is not permanent.

Goldman Sachs pointed out that once the ban is lifted, U.S. diesel prices will realign with European, Latin American, and Asian markets, at which point U.S. diesel prices will face upward pressure while overseas prices will ease somewhat.

But the bank emphasized that global refined product prices after the ban is lifted will still be higher than in the counterfactual scenario where "the ban was never imposed." The reason is that the temporary decline in U.S. refining capacity during the ban will leave cumulative global inventories below the no-ban scenario, and that gap will be difficult to close in the short term.

Impact five: Goldman Sachs reiterates long European gasoline

Based on the above analysis, Goldman Sachs reiterated its trade recommendation to hedge geopolitical risk: long 2027 European gasoline positions (such as EBOB Jun27).

Goldman Sachs gave three reasons:

First, the gasoline market is tightening rapidly — high diesel prices have already prompted global refiners to shift output from gasoline to diesel, and if U.S. diesel export restrictions push overseas diesel prices higher, this shift will intensify further.

Second, if the United States later includes gasoline in export restrictions, gasoline markets outside the United States will tighten further; even if only diesel exports are restricted, once U.S. diesel tanks hit their limit and refining capacity falls, the global gasoline market will also tighten after the ban is lifted.

Third, Europe's strategic gasoline reserves are only one quarter of its diesel reserves, giving policymakers far less buffer than for diesel and limiting their ability to smooth gasoline prices by releasing reserves.

Policy debate is still ongoing

A ban is not the only option.

According to Bloomberg, oil industry executives and industry groups are pushing for a suspension of the federal diesel excise tax ($0.24 per gallon) as an alternative, arguing it could ease price pressure without triggering the side effects of an export ban. But the proposal is controversial within the government, especially since the House of Representatives is currently in a pre-election recess, leaving the operational path for a tax exemption unclear.

Energy Secretary Chris Wright said last week that the government is working with refiners to explore alternative voluntary export cuts to avoid a mandatory government ban.

According to people familiar with the matter cited in reports, some refiners have already added protective clauses to contracts to prevent a diesel export suspension from affecting delivery obligations to foreign buyers.