A US diesel export ban would trigger global stock drawdowns, cut US refinery utilisation and risk driving gasoline prices higher

As US diesel prices soar and political pressure for an export ban grows, a new Wood Mackenzie analysis warns the move could have considerable ripple effects, triggering significant global product stock drawdowns while ultimately proving self-defeating for American consumers.

US retail diesel prices hit an all-time high of $6.51 per gallon on 21 September (and have continued to rise), prompting calls from certain lawmakers to pause exports and prioritise domestic supply. However, Wood Mackenzie's analysis shows that banning exports would quickly fill PADD 3 inventories, force US refiners to cut crude runs sharply, and ultimately increase the volume and cost of gasoline imports, potentially shifting the cost burden from diesel to gasoline at the pump.

Beyond US borders, a ban would accelerate product stock drawdowns across global markets at a time when Europe's share of US diesel/gasoil exports has already risen to almost 50% in September 2026, up from a 30% average through 2025.

"A ban on US diesel exports would increase competition for non-US barrels in an already tightly supplied market," said Alan Gelder, SVP Refining, Chemicals and Oil Markets, Commodities Research, at Wood Mackenzie. "Given Russia's diesel export ban and high European utilisation, China is currently the only country with material spare refining capacity that could cover the loss of US refinery throughputs. However, China may well decide it is not in its interest to do this."

US diesel export ban could inversely affect gasoline prices

US diesel exports have risen 340 kb/d over the past six months versus the 2025 average, absorbing three successive supply losses: the initial loss of Middle East barrels following the Strait of Hormuz closure, then the loss of Russian diesel exports from mid-July, and now a lower crude supply outlook on top of both.

Wood Mackenzie finds that if a ban were enacted, 700 kb/d of diesel and gasoil oversupply would be redirected into storage, effectively filling PADD 3 inventories to maximum capacity in just over a month.  Inventories in the rest of the United States, most notably the structurally short PADD 1 region, would reach capacity in approximately five or more additional weeks. 

To prevent inventories from exceeding capacity, crude run cuts of over 2 million bpd would be required. Given that PADD 3 currently imports less than 2 million bpd of crude, this could also require an increase in US crude exports and the diversion of some US crude imports. The knock-on effects for American consumers could be significant, particularly at the gasoline pump.

"The irony of a US diesel export ban is that it would likely increase costs for American consumers," said Gelder. "Cutting crude runs to manage the oversupply would shift the cost burden from diesel to gasoline, meaning a policy designed to bring relief at the diesel pump could end up driving prices higher at the gasoline pump."

Global markets face more pressure

Wood Mackenzie's modelling shows global diesel and gasoil inventories outside the US facing accelerated drawdowns as displaced US supply fails to reach those markets.

Europe is particularly exposed and operating at maximum refining utilisation. It has no spare capacity buffer to absorb the loss. Under the ban scenario, NW Europe diesel cracks are forecast to rise 27% as European buyers compete harder for an already scarce pool of non-US barrels.

Latin America would face an equally challenging search for replacement supply. Wood Mackenzie's modelling identifies China at plus 300 kb/d and Russia at plus 190 kb/d as potential sources to fill the gap, but each comes with significant current constraints. Russia is already holding its own export restrictions.

That leaves China as the only country with the spare refining capacity to cover the shortfall in any meaningful way. As Wood Mackenzie's analysis makes clear, China may well decide it is not in its interest to intercede.