Global Markets

Previously, we shared perspectives from experts, analysts, reporters and even some current (and former) administration officials on why an export ban on U.S. crude oil or American-made diesel, gasoline and refined products would be a grave mistake. Instead of cutting prices for consumers, it would result in less U.S. fuel production, tighter supplies, greater energy security risks and higher prices. Here are even more perspectives on why an export ban is the wrong move for U.S. energy security.

It may seem logical that if the United States stops exporting diesel, more fuel will stay here and prices will fall. But more diesel in the United States does not necessarily mean lower prices at the pump, especially when the United States is not facing a shortage of diesel. If refiners cannot export or economically store surplus diesel, some could reduce production, which tightens supplies, puts upward pressure on fuel prices and weakens U.S. energy security.

We've heard some talk lately about export bans and whether cutting off U.S. crude oil or American-made diesel, gasoline and refined products from the global market could be used as a tool to cut prices for consumers. Administration officials like Energy Secretary Chris Wright and Interior Secretary Doug Burgum see export bans as a clear unforced error, and they’re not alone. Other experts, commentators and analysts share the view that an export ban would be a costly and counterproductive mistake. It would mean less U.S. fuel production, tighter supplies, greater energy security risks and higher prices.

Supply disruptions tied to the Strait of Hormuz have renewed questions about U.S. energy security and why events halfway around the world still affect energy markets here at home. While we are the world’s largest crude oil producer and make more than enough gasoline, diesel and jet fuel to meet domestic demand, we still import and export both crude oil and refined products.

U.S. refiners play a critical role in moments of supply/demand imbalance. Thanks to their scale, complexity, efficiency and global reach, American refineries keep fuel flowing efficiently here at home while also supplying much-needed gasoline, diesel, jet fuel and other products to our allies abroad.

AFPM issued the following statement on the passage of California legislation that will empower the state’s unelected bureaucracy to impose an effective windfall tax and massive regulatory burden on the state’s remaining refineries. "...Add this legislative cocktail to the list of self-inflicted policy wounds for a state already bleeding people."

In a tight refined product market it has been U.S. refiners that have stepped up. Our industry ran full-out for most of 2022 making sure American consumers, our domestic economic centers and our allies had enough gasoline, diesel and jet fuel to keep everyone moving. Our refining sector leads the world in liquid fuel production and is effectively doing more than any other to bring better balance to the global market.

AFPM President and CEO Chet Thompson issued the following statement in response to President Biden’s State of the Union address: "Using the State of the Union to politicize market fundamentals and single out stock “buy back” programs—while overlooking the fact that the Biden administration’s own policies discourage the reinvestment of earnings back into the U.S. liquid fuel supply chain—cheapens the dialog for everyone."

Restricting exports would be a major unforced error for the President, tightening global fuel supplies, throttling U.S. fuel production and increasing costs for American consumers. Likewise, imposing product inventory requirements boils down to siphoning gasoline and diesel into storage, and away from consumers.