The Trump administration is drawing a clear line as oil prices surge: no export ban.
With Brent crude pushing $110 per barrel and U.S. gasoline prices nearing $4 a gallon, pressure is building in Washington to respond to the fallout from the Iran war. But officials are signaling they won’t reach for one of the most disruptive policy tools on the table—restricting U.S. crude exports.
“Oil and gas export restrictions are not under consideration,” a Trump official said on Thursday, according to the Financial Times.
That reassurance comes as industry leaders warn that an export ban would backfire almost immediately.
U.S. fuel prices are tied to global benchmarks, not just domestic supply. Cutting exports would not meaningfully lower gasoline or diesel prices for consumers. Instead, it would reduce revenue for producers by limiting access to higher-priced international markets, ultimately discouraging drilling at a time when additional supply is needed.
There’s also a structural issue. The U.S. refining system isn’t configured to absorb all domestic crude. A ban would likely create a regional glut along the Gulf Coast while doing little to ease fuel constraints in key consuming regions like the Northeast and West Coast.
More importantly, pulling U.S. barrels off the global market would tighten supply internationally, putting further upward pressure on crude prices. That increase would feed directly back into U.S. fuel costs, undercutting the very goal of the policy.
With fuel costs climbing sharply since late February, however, the administration is facing mounting pressure to act.
So far, the response has focused on less disruptive options. Officials have already tapped the Strategic Petroleum Reserve and are weighing additional measures, including the possibility of easing restrictions on Iranian crude that is already on the water to bring more supply into the market.
By Julianne Geiger for Oilprice.com
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