After the US, China also blocks fuel exports – They know something and are preparing for the big shock

An extremely worrying message is being broadcast by recent developments in the global energy market. In a matter of days, both the US and China are moving forward with or considering measures to curb fuel exports, raising new questions about the adequacy of international fuel supply. The administration of Donald Trump is considering a ban on diesel exports, attempting to contain domestic prices, which have skyrocketed. At the same time, China has reportedly suspended exports of refined fuels for October, giving absolute priority to its domestic supply security. When two of the planet's largest energy players turn simultaneously toward protecting domestic stockpiles, the energy market has every reason to be concerned. The critical question is whether these are merely temporary measures to address high prices or if both nations are preparing for a prolonged period of severe disruptions in global fuel availability.

Trump considers diesel block – Pressure to drive down US prices

Donald Trump stated on September 30, 2026, that he daily discusses the possibility of banning diesel exports, as the American administration seeks ways to curb energy costs. The US president acknowledged that such a measure could have adverse effects on gasoline prices, but argued that it might help reduce the cost of diesel. Pressures are severe. Gasoline prices in the US have surged more than 40% year-over-year, while diesel recently reached an all-time high of $6.53 per gallon, according to AAA data. The American government is weighing various options: from a generalized export ban to voluntary restrictions by refineries and broadening the availability of tax-exempt diesel. However, such a decision would not be limited to the American market. The US has evolved into a vital diesel supplier for many economies, filling part of the void left by export disruptions from Russia and the Middle East. Consequently, an American block could transfer pressure to importing nations, intensifying competition for available cargoes and exacerbating price hikes.

China freezes exports – Priority given to domestic adequacy

While Washington considers restrictions, Beijing has reportedly already moved in the same direction. According to Reuters, Chinese refineries suspended exports of petroleum products to destinations outside Hong Kong and Macau for October, awaiting fresh instructions from the Chinese government. State-owned oil giant PetroChina canceled certain shipments of gasoline and jet fuel scheduled for October. Simultaneously, Zhejiang Petrochemical Corp scheduled no shipments of petroleum products during China's holiday week. The decision forms part of Beijing's push to guarantee domestic energy security, as armed conflicts have constrained the global supply of crude oil and refined products. Reuters highlights that it remains unclear when exports might resume. The development will depend, among other factors, on domestic inventory levels and refinery production rates. China had eased export restrictions since mid-July, allowing shipments to recover. In August, exports of gasoline, diesel, and jet fuel reached a combined total of 4.58 million tons. Now, however, priorities appear to be shifting: first satisfying domestic fuel demand and subsequently allocating any surplus to international markets.

Are the two superpowers closing the door on exports?

The coincidence of actions by the US and China creates a novel, highly dangerous condition for global energy markets. On one hand, Washington is contemplating limiting exports of a fuel critical to transportation, industry, and the global supply chain. On the other hand, Beijing is restricting exports of refined products to safeguard its own stockpiles. To date, there is no evidence demonstrating that these two moves form part of a joint plan or herald a coordinated strategy. However, this parallel turn toward energy self-sufficiency reveals how vulnerable the global market has become. The prospect of restricted fuel availability in international markets, at a time when energy demands remain high, causes justifiable alarm. And the emerging question is clear: Are the world's largest economies preparing for a scenario in which securing fuel takes precedence over export revenue?

The war in the Middle East alters energy balances

The root cause of this turmoil lies in armed conflicts and their impact on global crude production and distribution. The war in the Middle East has restricted available quantities of crude and refined petroleum, while attacks on energy infrastructure in Russia have further burdened supply. The impact is particularly severe for diesel, as the market relies on a limited network of major exporters and refiners. According to a Reuters analysis, the US increased diesel exports by more than 20% in 2026, reaching approximately 1.3 million barrels per day. In doing so, it covered part of the volumes lost from Russia and the Middle East. Yet increased export activity comes at a price: American diesel inventories have fallen to unusually low seasonal levels, strengthening arguments in favor of restrictions. Concurrently, China faces its own pressure. Low fuel stocks and crude supply disruptions limit the maneuvering room for Chinese refiners.

Energy protectionism with global consequences

If export restrictions expand, consequences could be deeply felt in countries relying on imports of diesel and petroleum products. Europe, which has curtailed imports of Russian fuel following the Russian invasion of Ukraine, has increased its reliance on alternative suppliers, including the US. Reuters reported on October 1 that the American government pressured France and Germany to release emergency diesel reserves, warning of a possible restriction on US exports. According to the same report, Washington asked the European Union to release 120 million barrels of diesel over the next six months. This development reveals the magnitude of market stress: the US, a key global fuel provider, is considering restricting its exports while simultaneously asking Europe to release part of its strategic reserves. It is a picture highlighting the intensity of energy competition and the difficulty of ensuring adequate supplies during a prolonged crisis.

Temporary defense or preparation for a prolonged crisis?

The simultaneous mobilization of the US and China does not in itself prove that a new global energy crisis is imminent. It does, however, serve as a clear indication that both nations face severe risks regarding fuel supply adequacy and cost. Washington attempts to contain domestic prices, while Beijing prioritizes protecting its reserves. Both moves share a common outcome: fewer available fuel quantities for international markets should restrictions be extended or expanded. The possibility of a prolonged conflict in the Middle East, combined with disruptions in Russian energy production, renders restoring market balance even more difficult. Markets must now answer a critical question: Are export restrictions merely a temporary reaction to energy turmoil, or do they herald an era where major powers keep increasingly more fuel supplies for themselves? If the second scenario prevails, the cost will not be limited to oil prices. It could spill over into transport, manufacturing, production, and ultimately consumer goods prices, transferring the energy crisis directly into the daily lives of households and businesses.

Financial Times: Diesel will remain sky-high for a year

Elevated fuel prices in the US do not appear to be a fleeting issue. On the contrary, leaders in the American oil and energy sector estimate that the diesel market will require more than a year to return to normal levels. According to a Federal Reserve Bank of Dallas survey cited by the Financial Times, nearly half of respondents estimate it will take more than four quarters for diesel prices to return to 2025 levels. These findings heighten concerns over the duration of the energy crisis, as the repercussions of the war with Iran and Ukrainian strikes on Russian oil facilities continue to constrain fuel supply.

Alarm in the American oil industry

The Federal Reserve Bank of Dallas survey was conducted among approximately 100 oil and gas companies in the US. It represents a quarterly logging of energy industry conditions and forecasts, which, thanks to respondent anonymity, often captures the candid views of industry executives. Nearly half of respondents estimate that it will take more than a year for diesel prices to fall back to 2025 levels. This assessment serves as a warning for the outlook of the American economy, as diesel is a critical fuel for transportation, agriculture, industry, and supply chain operations. "Diesel is the mother's milk of the economy. We are only now starting to see its impact on the broader economy," stated a survey participant working for an oilfield services provider. This statement reflects the risk of the energy crisis spreading across the whole economy, as elevated fuel costs gradually pass into product and service prices.

Record $6.50 per gallon

In early September, the price of diesel in the US spiked to $6.50 per gallon, surpassing the previous historical high recorded in 2022. The surge in fuel costs has already caused severe strain on American farmers, small businesses, and freight carriers. The issue extends beyond pump prices. Diesel represents a core cost factor in transporting agricultural produce, operating farm machinery, and moving commercial freight. Thus, prolonged high prices threaten to reinforce inflationary pressures and further burden American households.

War with Iran and Ukrainian strikes strangle supply

The crisis in the diesel market is directly linked to disruptions across the global energy supply chain. The war with Iran has curtailed fuel supplies from the Middle East, while Ukrainian attacks on Russian refining facilities have created additional market pressures. Reduced available quantities from these regions have heightened the importance of American exports, as buyers in Europe and Latin America turn to the US to meet their requirements. However, increased demand for American diesel presents a dilemma for Donald Trump's administration: whether to continue exporting to support international clients, or restrict shipments to increase domestic fuel availability.

Trump considers banning diesel exports

Pressure from high prices has led Donald Trump to consider enforcing a ban on diesel exports from the US. The American president discussed the possibility of implementing such a measure with his advisers on Monday, aiming to increase domestic supply and lower prices. At the same time, Washington is intensifying pressure on European allies, requesting that they release part of their diesel reserves to the market. American officials have also discussed asking China to increase diesel production. These moves reveal the extent of anxiety surrounding fuel adequacy. Concurrently, they highlight the contradictions of a policy seeking to contain domestic fuel prices while the international market grows increasingly dependent on American shipments.

The export ban paradox: Cheaper diesel in the US, pricier fuel globally

A ban on diesel exports from the US could initially increase available supplies in the domestic market and exert downward pressure on prices. However, analysts warn that long-term effects could be the exact opposite, as international buyers seek alternative sources, intensifying global fuel competition. Claudio Galimberti, chief economist at Rystad Energy, warned that buyers in Europe and Latin America relying on American exports to cover shortfalls from the Middle East will face significant price spikes. "An official export ban will sharply push up diesel prices in Europe and Latin America, areas where fuel inventories are already low," Galimberti stated. He also warned that prices for gasoline and jet fuel in the US will gradually rise as Gulf Coast refineries are forced to curtail operations over a short period. In other words, a decision intended to bring relief to American consumers could create new pressures in international markets and the American economy itself.

Energy nightmare for Republicans ahead of the midterms

Surging diesel prices are evolving into a serious political problem for Republicans as the November midterm elections approach in the US. High prices directly burden farmers and small businesses while raising transport and production costs. This pressure could fuel voter discontent with the administration if no meaningful price relief occurs before the polls open. The political dimension of the energy crisis is especially visible in Texas, where the race for a Senate seat has grown unexpectedly competitive. Republican Governor Greg Abbott declared a statewide emergency in Texas on Monday due to escalating diesel prices. Simultaneously, he moved to relax certain freight transportation restrictions, seeking to lower costs for businesses and facilitate the transport of fuel and agricultural goods.

Emergency measures in Texas – Restrictions on diesel usage relaxed

As part of the emergency measures, Greg Abbott temporarily permitted the use of dyed diesel on Texas roads. This fuel is typically prohibited for use in vehicles operating on public roads, as it is intended primarily for off-road machinery and equipment under different tax regulations. The decision aims to lower costs for farmers and freight transport professionals, allowing them to utilize fuel normally subject to distinct regulatory rules. The governor also requested that the US Environmental Protection Agency (EPA) temporarily suspend requirements for ultra-low sulfur diesel. "Texas agriculture and trucking run on diesel. Unprecedented prices endanger both sectors and raise costs for every Texas family," Abbott stated. He added that farmers and truck drivers can now use dyed diesel on state roads, while cargoes of fuel, agricultural produce, and timber can be transported with higher weight limits.

The market prices in a prolonged crisis

The core message of the Federal Reserve Bank of Dallas survey is that the energy crisis may prove far longer-lasting than markets anticipate. The projection that diesel prices may require over a year to return to 2025 levels underlines risks for the American economy and international markets dependent on US exports. At the same time, the Trump administration faces a tough dilemma: an export ban might offer temporary relief domestically, but risks triggering new global price hikes and burdening other fuel categories inside the US. The political stakes are clear: if fuel costs remain at historic highs through November, the energy crisis risks becoming a main driver of discontent among American voters ahead of the midterm elections.

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