{
  "id": 9763666,
  "title": "Talk of diesel export ban deepens US crude futures’ discount to global benchmark",
  "url": "https://urgent.news/2026/09/25/talk-of-diesel-export-ban-deepens-us-crude-futures-discount-to-global",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-25T11:54:52.000Z",
  "source": {
    "name": "The Business Times - Companies & Markets",
    "slug": "the-business-times-companies-markets",
    "url": "https://www.businesstimes.com.sg/international/talk-diesel-export-ban-deepens-us-crude-futures-discount-global-benchmark"
  },
  "original_language": "en",
  "account": "Rising freight rates and limited vessel availability have dampened demand for American oil, according to Houston news reports. Washington's discussion of a potential diesel export ban is widening the gap between U.S. crude oil futures and the global Brent benchmark, indicating markets anticipate reduced crude processing by U.S. refiners if diesel production stays domestic. While this may alleviate high domestic diesel prices, currently at a record US$6.528 per gallon, the wider discount for domestic crude futures could signal higher petrol prices ahead and potentially lead to further diesel price increases in the long run. As investors factor in the likelihood of stranded diesel in the U.S., West Texas Intermediate (WTI) crude futures fell as much as US$12.02 per barrel behind Brent futures on Thursday, Sep 24, their widest gap since May 6, according to LSEG data. Analysts predict U.S. refiners could slash their crude runs by up to 12 percent if diesel exports are barred, with key storage facilities likely filling up within a month. The U.S. is the globe's leading diesel exporter, with net exports of around 1.2 million barrels daily, compared to 5.1 million bpd production, per Morgan Stanley estimates. These exports have helped offset the deficit from Middle Eastern barrels due to the Strait of Hormuz being largely blocked. Wood Mackenzie analysts said a diesel export ban would transfer a 700,000 bpd surplus of diesel and gasoil to storage, filling Gulf Coast inventories almost to capacity in about a month. This would compel U.S. refiners to cut crude runs by over 2 million bpd to avert surpassing storage limits, equivalent to a 12 percent reduction in current US refinery crude runs. The chances of a U.S. diesel export ban remain unclear. The White House denied media reports of planning a 90-day diesel export ban on Wednesday and Energy Secretary Chris Wright stated a ban wouldn't control surging prices. However, President Donald Trump endorsed a ban on Tuesday. Meanwhile, Wright has reached out to senior executives of major American refiners in recent days to assess support for voluntary restraint on diesel exports as the administration explores alternatives, according to three people privy to the talks. The demand for a U.S. export ban stems from soaring diesel prices, which hit records in the U.S. and Europe. On Thursday, U.S. prices stood at US$6.514 per gallon, per AAA, as the U.S.-Iran war disrupts global supplies. This could pose issues for Trump's Republican Party in the November midterm elections, as it may exacerbate inflation and impose a heavy toll on farmers, a key support base for the party. The Iran conflict complicates matters further by elevating shipping costs. The widening WTI-Brent spread, typically encouraging U.S. oil demand and exports, is hindered by rising freight rates and limited vessel availability, said Georgios Sakellariou, a freight analyst at Signal Maritime. US crude exports to Asian markets via very large crude carriers now cost approximately US$50 million, compared to US$16 million before the Iran war exacerbated war risk premiums. The amount a barrel of U.S. crude must be below a European barrel to counteract shipping expenses was once around minus US$4, but now likely double at minus US$8 due to surging freight rates, per Mizuho energy futures director Bob Yawger. Oil trader Shohruh Zukhritdinov of NitrolOil said global crude is facing heightened scarcity and logistical premiums, while U.S. barrels struggle to export at present transportation costs. The WTI-Brent spread has consistently traded at a US$4 discount or more since July 7, but U.S. crude exports have remained steady, increasing by only 45,000 bpd from July to August, at 3.72 million bpd, per Kpler data. A three-month average projection for September U.S. crude exports suggests a decline for the third straight month, to the lowest level since before the Iran war commenced in February, Kpler further indicated. \"A wide paper spread is a cue to test the arbitrage, not evidence that the arbitrage is open,\" Zukhritdinov commented.",
  "summary": "Rising freight rates and tight vessel availability have dimmed demand for American oil",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}