If US President Donald Trump implements his announced plan to halt diesel exports from the United States, consumers should brace themselves for further price increases. Jörg Krämer, chief economist at Commerzbank, noted in “Der Spiegel” that Russia banned diesel exports back in July. Following that action, the price of diesel on the global market rose by 16 percentage points more than crude oil prices. Krämer told the magazine that if the U.S. were to impose an export ban, diesel prices would likely rise even more sharply this time. He pointed out that demand is increasing due to the approaching heating season, as heating oil and diesel are chemically very similar products.
According to Krämer, diesel could become 20 to 25 percent more expensive. This increase, he estimates, would raise inflation across the Eurozone by about half a percentage point, given that rising diesel costs would consequently drive up the prices of other goods. He also cautioned that this would lead to a noticeable economic slowdown.
The United States is a major exporter of both diesel and heating oil. Considering this fact, Krämer considers it “unlikely” that Washington would actually cease diesel exports, noting that such a move would dampen the profits of the US oil industry, which maintains good relationships with Trump.
