Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, predicted that oil prices, including diesel, are set to rise significantly, regardless of the outcome of the Iran war. He described elevated energy prices as 'a tax on the economy' and warned that diesel, in particular, would have a harmful impact due to its critical role in agriculture and transportation. Schiff noted that the AAA national average price for diesel recently reached a record $6.5276 per gallon as of Tuesday, before slightly declining to $6.5141 by Thursday [1]. He attributed the persistent upward pressure on prices to the Federal Reserve's prolonged loose monetary policy and suggested that the recent quarter-point rate hike was insufficient to curb inflation. Schiff also highlighted the depletion of the U.S. Strategic Petroleum Reserve (SPR), which has dropped from over 400 million barrels to more than 284 million, warning that replenishing these reserves could further drive up prices [1].
Simultaneously, major U.S. business groups, including the Chamber of Commerce, Business Roundtable, National Association of Manufacturers, and American Petroleum Institute, sent a joint letter to President Donald Trump warning that a proposed diesel export ban would be counterproductive. They argued that such a ban would reduce fuel production, tighten supplies, and ultimately raise costs for American families, farmers, and truckers [2]. The letter was prompted by Trump's comments advocating for a diesel export ban during administration deliberations, which surprised the oil industry and business groups. Trump stated, 'I've said let's not send out the diesel. We make a lot of diesel,' and confirmed he had discussed the idea within his administration [2].
The national average diesel price stood at $6.51 per gallon on Thursday, $2.82 higher than the same period last year, according to AAA data [2]. The administration is currently studying the feasibility of a full or partial export ban, with Treasury Secretary Scott Bessent indicating that the White House is examining the impact on refining capacity [2]. Reports of a potential 90-day export ban led to a decline in diesel futures and shares of U.S. oil refiners [2]. However, U.S. Energy Secretary Chris Wright clarified that a full blanket ban is not under discussion, emphasizing the focus is on maximizing domestic diesel supply while maintaining flows of other fuels [2]. Wright and other energy experts warned that an export ban could initially lower diesel prices in some regions but would ultimately result in higher fuel prices as refiners cut production [2].
Both sources highlight the ongoing challenges posed by high diesel prices and the complex policy debates surrounding potential interventions. Schiff's outlook remains bearish, expecting continued upward pressure on energy prices due to structural and policy factors, while industry groups and government officials caution against measures like export bans that could exacerbate supply constraints and price volatility [1][2].
CONCLUSION
Diesel prices in the U.S. remain at record highs, prompting warnings from economists and industry groups about further increases and the risks of policy interventions such as export bans. While the administration considers its options, both market experts and business leaders caution that attempts to artificially suppress prices could backfire, leading to tighter supplies and even higher costs. The outlook for energy prices remains uncertain, with significant upward pressure expected in the near term.