Republican Senator Chuck Grassley has called on President Donald Trump to place a ban on diesel exports to help lower domestic fuel costs, which he warned are “KILLING FARMERS' INCOME.” On Saturday, the Iowa lawmaker urged the president to “put an embargo on diesel exports like presidents in the 70s put embargoes on ag products bc food prices were inflated”—a likely reference to those enacted on soybean exports by Richard Nixon’s administration. Amid supply constraints caused by the Iran war and other global pressures, the national average price for diesel has climbed over $6 per gallon and continues inching up—reaching another all-time high of $6.51 on Sunday. This compares to a $3.70 a year ago.
In Iowa, diesel has risen to a record $6.29 a gallon from $5.35 over the past month. And the rising costs have created difficulty for farmers across the country while presenting another political vulnerability for the GOP only weeks out from the midterm elections. Newsweek has contacted Grassley’s office and the White House via email for comment.
According to the Watson School of International and Public Affairs at Brown University, U.S. households have now spent an additional $50 billion on diesel since the launch of the Iran war—based on the per-gallon price rising around 77 percent to $6.49 as of Sunday. And after diesel surpassed its all-time high in early September, the agricultural sector in particular has been warning about the potential fallout for their finances and American food supplies. This has become especially pressing in recent weeks, given the need to operate tractors, combines and other equipment at the peak of crop-harvesting season.
"Trump says the United States is winning the war in Iran and we are in control the Strait of Hormuz. Based on 10-dollar diesel fuel we are losing the war," John Boyd, founder and president of the National Black Farmers Association, told Newsweek last week. He added that "struggling farmers are paying the price, losing our profit margin and going out of business." The Department of Agriculture told Newsweek in response that Trump “recognizes that diesel powers American agriculture and this administration is not leaving any stone unturned to resolve this temporary challenge.” The U.S. exported nearly 400 million barrels of diesel last year, according to data from the Energy Information Administration.
And since the launch of the Iran war, the global shortage and resulting rise in prices has incentivized further exports—with the nearly 50 million barrels exported in May representing an all-time high in records going back to 2009. As Grassley notes, embargoes have been used in the past to address “inflated” prices, and the idea of a temporary export ban has gathered some momentum with other Republicans on Capitol Hill. On Tuesday, Senate Majority Leader John Thune, said he was “open” to looking at an export ban.
Tennessee Representative Tim Burchett, meanwhile, this week filed a bill which would ban diesel exports to other countries through January 2027. Interior Secretary Doug Burgum, however, has argued that a ban would not offer any relief for U.S. farmers or households. And such a plan would also likely face industry pushback, with American Fuel & Petrochemical Manufacturers—a trade association presenting the oil industry—arguing that, “if refiners cannot export or economically store surplus diesel, some could reduce production, which tightens supplies, puts upward pressure on fuel prices and weakens U.S. energy security.” “Export bans do not create more fuel for Americans,” the organization wrote in a recent fact sheet.
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