The Washington Post reports:

The administration has long since exhausted the tools available for mitigating the damage to consumers [caused by high fuel prices]. It paused the century-old Jones Act that limits what vessels can ship fuel between U.S. ports. It has spent heavily on a military operation to protect ships seeking to traverse the Strait of Hormuz from attack, which has helped restart the flow of some fuel through the waterway. It has urged Ukraine to stop the attacks on Russian refineries that are exacerbating the shortage.

But short of an abrupt end to the war in Iran and rapid repair of the refineries around the world that have been damaged in fighting, there is little relief in sight.

The political fallout is landing in deep-red voting districts the hardest. Federal data shows these tend to be the places where diesel makes up the largest proportion of the overall fuel mix. This is especially the case in farming communities, where diesel powers the fuel-thirsty tractors and other machinery that the agriculture industry relies on.

That has led lawmakers to demand what was unthinkable in the GOP only a couple of months ago: a ban on diesel exports from the United States. The proposal seems to make sense on its face: restrict the flow of the fuel out of the U.S. to boost the supply domestically, quickly lowering prices.

The problem is that almost nobody who understands oil markets — including Energy Secretary Chris Wright — believes it would work out that way. Analysts who have been modeling the impact of a diesel export ban are consistently warning it would create chaos and hurt consumers.

The Gulf Coast refineries that typically export diesel abroad would get overloaded with a glut of crude that would have to be diverted to storage. The diesel they make would mostly be stranded in their region, because there are no pipelines to get it across the country.

Parts of the country that rely on imports of diesel could then see prices soar even higher than they are now. “It is not at all clear that the national price of diesel would fall,” the Energy Policy Research Foundation said Thursday in a report.

“The proposed US diesel export ban will not play out as the US administration expects,” Susan Bell, senior vice president for commodity markets at the research firm Rystad Energy, wrote in a market update Thursday. Such a ban would unleash a cascading series of events at refineries that could “drive gasoline prices to extreme heights across the U.S.” [Continue reading…]