A US diesel export ban would initially lower domestic retail diesel prices by an estimated $0.25 per gallon per week. The policy would likely turn inflationary after roughly two months, as diesel storage fills and gasoline prices rise.
In its October 2 Global Economics Comment, “Who Would Be Exposed to a Ban on US Diesel Exports?”, Goldman Sachs Global Investment Research identifies Latin America as the region most exposed to a sudden supply cutoff. The report combines its commodities team’s price forecasts with EXIOBASE input-output tables to estimate production losses and inflation effects.
Wholesale Diesel Prices Are Up More Than 80%
“But gasoline accounts for a much larger share of the consumption basket, so the net impact would most likely be inflationary after two months.”
GS Goes Long June 2027 Gasoline, Says Diesel To Squeeze Pricing
Goldman says the refined-products crisis is spreading from diesel to gasoline as refiners cut gasoline output, global exports fall and inventories move toward seasonal lows.
Refiners switching more production from diesel to gasoline, or a sharp increase in diesel demand, would reduce the gasoline price increase. The core inflation effect would likely remain small and negative for at least 12 weeks: diesel has a relatively greater role as a production input, and producer costs pass through to consumer prices with a delay.
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