IANA: A Diesel Export Ban May Lower U.S. Prices—and Raise Freight Risk

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Andrew Sibold, Director of Economics at the Intermodal Association of North America, recently published an analysis that challenges a key assumption in the diesel-export debate.

If the United States stops exporting diesel, domestic prices are expected to fall nationwide. However, Sibold’s analysis raises a critical question for freight operators: Would the fuel be available where it is needed, or would it accumulate in regions already well supplied?

This question is important as diesel reached $6.53 per gallon nationally during the week of September 21. Rising fuel costs are impacting carrier margins, shipper budgets, bid strategies, routing decisions, and customer discussions. Meanwhile, President Donald Trump has supported export restrictions, while Energy Secretary Chris Wright has cautioned that a blanket ban could reduce refinery output and increase gasoline and jet fuel prices.

In summary, a diesel export restriction may reduce the national average price but does not necessarily lower freight costs across the network. Geography, infrastructure, and refinery economics will determine where any relief occurs.

FreightFA tracks the fuel, capacity, rail, and policy signals that can change transportation costs well before they show up in a bid, surcharge, or quarterly result.

A Lower National Average Can Hide Higher Coastal Costs

The latest numbers explain why Washington is considering action:

• The EIA weekly price series put U.S. on-highway diesel at $6.529 per gallon on September 21.
• West Coast diesel averaged about $7.46, compared with roughly $6.18 on the Gulf Coast—a difference of approximately $1.28 per gallon, according to regional EIA data published by Transport Topics.
• U.S. distillate inventories had fallen below 97 million barrels, roughly 13% below the five-year seasonal average, according to Reuters.
• The EIA’s September outlook expects inventories to remain unusually low as global distillate Production stays constrained.

These figures make export restrictions politically appealing, as retaining more diesel domestically could increase supply and lower prices.

However, this perspective overlooks a key freight issue: the United States is not a fully integrated diesel market.

Most export and surplus refining capacity is concentrated along the Gulf Coast. Restricting exports would initially increase diesel supply and lower prices in that region, but would not automatically provide similar relief to California, the Pacific Northwest, or the Northeast.

As a result, a lower national average could coincide with high fuel prices at key containerized freight gateways.

Gulf Coast Supply Cannot Easily Relieve Coastal Markets

Sibold’s argument highlights that infrastructure challenges are more significant than supply issues.

The Gulf Coast and Midwest are relatively well connected. They have strong refinery supply and pipeline access. If more barrels remain in the domestic market, these regions are positioned to benefit first.

The West Coast operates as a separate market, largely isolated from the rest of the U.S. petroleum system due to the absence of pipelines crossing the Rocky Mountains. California and the Pacific Northwest rely on local refineries and waterborne supply. Retaining additional diesel in Texas or Louisiana does not provide a means to transport it west.

The East Coast has access to supply but limited flexibility. Gulf Coast product moves north via pipelines, and imported barrels help balance the market during high demand. Pipeline capacity, storage, terminal throughput, vessel availability, and winter heating demand all influence how much additional fuel the region can absorb.

Photo by Georg Eiermann on Unsplash

Domestic marine transportation adds another constraint. The Jones Act generally requires cargo moving between U.S. points to travel on vessels that are U.S.-built, U.S.-owned, and coastwise endorsed, according to the Maritime Administration. A targeted waiver could add flexibility during a disruption, but it would not instantly create ships, terminal capacity, or storage tanks.

For this reason, managing fuel exposure based solely on the national diesel average is insufficient. A carrier operating Gulf Coast lanes and a drayage fleet serving Southern California may face two distinct fuel markets.

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Refinery Cutbacks Could Spread the Cost Pressure

Another important consideration for freight leaders is that refineries do not produce diesel in isolation.

Diesel, gasoline, jet fuel, and other petroleum products are produced by the same refining system. If refiners cannot export surplus diesel and storage becomes full, they may need to reduce overall refinery output.

Wright explained the risk directly:

“If you can’t export the diesel that comes out of our refineries, you run out of places to store it, and you have to reduce U.S. refining, which would put upward pressure on gasoline prices and jet fuel prices.” — U.S. Energy Secretary Chris Wright, via Reuters

Photo by Maksym Kaharlytskyi on Unsplash

This scenario extends the freight impact beyond trucking.

• Truckload, LTL, and drayage fleets face direct diesel exposure.
• Air cargo networks could face higher jet-fuel costs if refinery throughput declines.
• Brokers and forwarders may need to reduce quote validity periods as regional fuel markets diverge.
• Warehouses and manufacturers could absorb higher inbound and outbound transportation costs.
• Shippers may see surcharge formulas recover only part of the real increase, especially when congestion, detention, and empty miles rise with fuel costs.

The intended result may be cheaper diesel. The operating result could be a shifting mix of diesel, gasoline, jet fuel, and regional transportation costs.

High Coastal Diesel Prices Become Higher Cargo Costs

The freight connection becomes clearer when I look at where imported goods enter the country.

IANA’s underlying analysis shows that East Coast ports have handled roughly half of U.S. import containers in recent years, with the West Coast accounting for about another two-fifths. The exact percentage varies depending on whether the dataset measures import containers, total TEUs, tonnage, or selected ports. The latest Bureau of Transportation Statistics port report, for example, assigns 45% of total TEUs to the East Coast and 37% to the West Coast.

The broader point holds across the datasets: The coastal regions facing the greatest fuel constraints also handle most U.S. containerized trade.

Even when Rail moves a container for the long-haul portion, a truck usually handles at least one part of the inland journey. Diesel alternatives are growing in drayage, but they cannot replace the installed diesel fleet at national scale during a short-term fuel shock.

That creates a clear transmission path:

• Regional diesel prices rise.
• Drayage and inland transportation costs increase.
• Fuel surcharges and accessorial costs move through the network.
• Retailers and manufacturers pay more to move imported goods and components.
• Those costs eventually reach operating margins, inventory decisions, or customers.

This is the part of the story I believe executives and investors should watch. A policy can improve a national statistic while increasing costs at strategically important freight gateways.

A U.S. Export Restriction Could Reshape Global Fuel Flows

I also see a second-order risk outside the United States.

Europe has become more dependent on U.S. diesel as conflict and sanctions disrupt traditional supply. The European Commission warned that a disruption to American exports could hurt both sides and said it was in high-level contact with Washington, according to Reuters.

If U.S. barrels leave the global market, European buyers will have to compete for replacement cargoes from the Middle East, India, and other refining centers. That could change tanker routes, raise delivered fuel costs, and increase inland transportation expenses in import-dependent economies.

Exporting less diesel does not remove global demand. It changes who supplies it, how far it travels, and what buyers must pay.

Rail Can Help—but It Cannot Absorb a Fuel Shock Overnight

Higher diesel prices strengthen the intermodal value proposition, particularly on long, repeatable lanes. August U.S. intermodal volume averaged nearly 297,000 containers and trailers per week, up 4.4% year over year and setting a monthly record, according to the Association of American Railroads.

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