President Donald Trump is still weighing a U.S. diesel export ban, but prediction market traders see an outright prohibition as a long shot this month.
Polymarket puts the probability of the U.S. announcing a broad diesel export ban by Oct. 31 at 11%, with more than $181,000 traded on the contract. Restrictions such as quotas, tariffs or destination-specific bans would not qualify unless they effectively prohibit exports.
Kalshi traders separately put the chance of a U.S. diesel export ban before Election Day at 17%.
Trump kept the option alive Wednesday, saying his administration discusses it "every day." He acknowledged a ban could lower diesel prices while making gasoline more expensive.
Energy Secretary Chris Wright has opposed a blanket export ban, warning it could hurt refinery efficiency and push gasoline and jet fuel prices higher.
The administration has instead discussed voluntary export limits with refiners and is pressing France and Germany to release emergency diesel reserves, Reuters reported. A reserve release would add supply to the global market and could ease prices without forcing U.S. refiners to stop exporting.
Why a Ban Could Work at First
Goldman Sachs Group Inc. (NYSE:GS) estimates a ban could initially push U.S. diesel prices down by about 25 cents per gallon each week, roughly 4% from recent levels.
But Goldman says the effect could reverse once storage fills. Refiners may then have to cut production, which could push retail gasoline prices about 30 cents per gallon higher.
Why Gasoline Could Rise
A diesel export ban could eventually push gasoline prices higher because U.S. refineries make both fuels from the same crude oil.
If refiners lose overseas buyers for their excess diesel, storage tanks would start filling up. Once that happens, the only real way to stop producing more unwanted diesel is to process less crude, which also means producing less gasoline.
Jefferies downgraded major U.S. refiners Valero Energy Corp. (NYSE:VLO) and Marathon Petroleum Corp. (NYSE:MPC) to Hold on Sept. 22, citing a possible diesel export ban as one of the biggest risks facing the refining industry.
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