AmericasOilWatch — 23 September 2026

Washington is considering keeping US diesel at home

For months, the United States has been one of the countries capable of supplying replacement diesel into an increasingly disrupted global market.

That assumption can no longer be taken for granted.

On 22 September, President Donald Trump publicly backed restricting US diesel exports, saying he had called for the idea within his administration. Treasury Secretary Scott Bessent then confirmed that officials are examining whether an export restriction is feasible and whether a full or partial restriction could work.

There is no US diesel-export ban today.

But the possibility has moved from political speculation to an option being actively examined by the White House. Reuters, 22 September.

And it is happening against an unusually tight domestic market.

AAA's national average diesel price was $6.52 a gallon on 23 September, after reaching a record $6.53 on 22 September. AAA's year-ago average was $3.69, putting the current price roughly 77% higher than a year earlier. The EIA's latest weekly retail series also puts US diesel at $6.529 a gallon for the week of 21 September, up from $6.285 a week earlier. AAA · EIA weekly diesel prices.

US distillate inventories stood at 107.9 million barrels on 11 September — the lowest level for that point in the calendar year since EIA records began in 1982, and about 13% below the five-year average. The EIA expects inventories to remain unusually low through the end of 2026 and much of 2027. Reuters, 21 September · EIA Weekly Petroleum Status Report.

This is therefore not a debate about what to do with an American diesel surplus.

It is a debate about how an increasingly constrained supply should be allocated.

Keeping diesel at home does not necessarily create more diesel

Restricting exports appears simple: if diesel is expensive in the United States, stop exporting it.

The physical refining system is more complicated.

US Energy Secretary Chris Wright has opposed restrictions, warning that blocking exports could create a surplus on the Gulf Coast, weaken refinery economics and cause refiners to reduce crude runs. That would eventually mean less total fuel production, including gasoline.

He has also warned that an export ban could raise prices on the US East and West Coasts because diesel produced on the Gulf Coast cannot simply be redirected everywhere inside the country without transportation and infrastructure constraints. Reuters, 22 September.

That distinction matters.

National fuel supply is not the same thing as deliverable regional fuel supply.

American refiners are already running hard. Over the four weeks through 11 September, refinery utilisation averaged 97.5% and crude inputs averaged about 17.45 million barrels per day. In the latest individual week, utilisation eased to 96.8%, but the broader picture remains one of a system operating close to its available capacity. EIA refinery inputs and utilisation.

There is therefore limited easy refining capacity waiting to be activated. Higher margins can encourage refiners to maximise output, but when utilisation is already this high the next constraint becomes reliability, maintenance and logistics.

Europe now matters to the American diesel calculation

The most important external consequence is Europe.

Europe is structurally short of diesel and relies heavily on US exports. Reuters reports that an American export restriction could tighten European supplies further. Reuters, 22 September.

That matters because Europe is already struggling to replace middle distillates previously supplied from Russia and the Middle East.

Diesel is only part of the problem.

Energy Aspects estimates Europe will face a 510,000 barrel-per-day jet-fuel deficit in the fourth quarter. Jet-fuel inventories in the Amsterdam-Rotterdam-Antwerp hub have fallen to their lowest level in seven years, while Europe has increasingly turned to distant suppliers including the United States, Canada, Nigeria and South Korea. Reuters, 21 September.

The Atlantic market is consequently becoming unusually interconnected.

Europe wants additional American diesel and jet fuel.

America wants to rebuild its own depleted inventories.

And Washington is now considering whether some of those exported barrels should remain at home.

France is trying to squeeze more fuel from the system

One of the clearest indications of how tight the European market has become arrived from France this week.

President Emmanuel Macron has asked the European Commission to examine temporary changes to European requirements governing fuel density, vaporisation limits and desulphurisation. France has also proposed greater flexibility over biofuel blending, including allowing B10 diesel to replace B7 in some markets.

French refiners estimate that this regulatory flexibility could increase diesel and kerosene production by 5% to 20%.

That figure is an industry estimate — not additional production that has already appeared.

Macron said refiners and importers are experiencing increasing difficulty confirming fuel deliveries for the coming weeks. Europe currently obtains around 36% of its kerosene imports and 18% of its diesel imports from the Middle East, according to the French proposal. Reuters, 22 September.

The request matters because Europe's response is moving beyond prices and inventories into the technical rules governing how much usable fuel its existing refineries can produce.

Saudi Arabia has reopened the bypass — but not the system

There has been one significant improvement.

Saudi Arabia restarted its East-West Pipeline on 22 September, after the 10–11 September strikes. Early reporting identified two damaged pumping stations, but Reuters subsequently revised the count to three after analysing satellite imagery and checking with industry sources. Reuters, 17 September.

The pipeline allows Saudi crude to move across the country to Yanbu on the Red Sea, avoiding the Strait of Hormuz. Before the attack, Saudi Arabia had been routing roughly 4 million barrels per day through the system.

Pumping has now resumed, but initially at a low rate. A security source told Reuters that reaching 40% of the pipeline's 7 million b/d capacity could take a couple of days, while a full restart could take six to eight weeks. Aramco is seeking to restore flows toward the roughly 4 million b/d it had been routing before the attack. Reuters, 22 September.

There are also early indications that commercial flows are beginning to follow the engineering restart. One China-bound cargo was scheduled to load at Yanbu, while traders were positioning tankers near Port Said and Sidi Kerir for Mediterranean transfers.

That is real progress.

But it should not be confused with normalisation.

Saudi Arabia has restored partial redundancy — not normal export capacity.

Hormuz remains severely impaired

For AmericasOilWatch, the cleanest traffic measure remains our own like-for-like IMF PortWatch series rather than mixing providers with different vessel populations and baselines.

The latest published OilWatch reading shows a seven-day average of 3.1 observed transits per day through 20 September — about 3% of the PortWatch 2023 baseline of 92.3 per day, down from 5.3 a day and 6% of baseline a week earlier. The figures are AIS-derived and therefore remain a floor: dark transits are not captured. AmericasOilWatch Global Disruption Status.

Observed traffic has therefore roughly halved again over the past week, even as the Saudi bypass came back online.

Separately, and on a different vessel definition that is not combined into the PortWatch baseline, Reuters reported that a Kpler preliminary count fell to just two commodity-vessel crossings on 21 September, from ten the previous day. We carry it as corroborating evidence of continuing impairment, not as a measurement of the same population. Reuters, 22 September.

The route also remains hazardous.

On 20 September, the LPG carrier Al Maryah was struck while outbound. All 19 crew members were reported safe and the vessel later anchored at Khor Fakkan. On 21 September, the crude tanker LR Stephanie was struck by an unidentified projectile while entering the strait; two crew members suffered minor injuries, and the vessel continued under its own power. Responsibility for the incidents remained unconfirmed in the latest reporting. Reuters, 22 September · Hindustan Times, 21 September.

The Saudi pipeline restart therefore changes the situation without solving it.

Saudi Arabia can begin moving more crude around Hormuz. That reduces dependence on an impaired maritime chokepoint.

It does not restore the missing diesel, jet fuel and other refined-product flows on which Europe and other importing markets depend.

The one development that could change this quickly

There is now also a diplomatic route that could alter the physical picture within days — if it produces an agreement.

A senior Iranian official told Reuters on 22 September that Iran could reopen the Strait of Hormuz within seven days if the United States eased military pressure and lifted its blockade on Iranian ports.

Later the same day, Reuters reported that Iranian state media said Foreign Minister Abbas Araqchi had met US Special Envoy Steve Witkoff on the sidelines of the UN General Assembly and conveyed Iran's conditions for reopening the strait. Those conditions included the immediate lifting of the naval blockade, release of frozen Iranian assets and an end to war across what Iran calls the "resistance" fronts.

No agreement has been announced. The conditions remain substantial and the negotiations remain uncertain. But this is the development most capable of falsifying the current physical-supply thesis in the near term. Reuters, 22 September — proposal · Reuters, 22 September — conditions conveyed.

It also matters for interpreting the oil-price move.

Brent settled at $99.25 a barrel on 22 September, down $1.09. Reuters attributed the easing to a combination of increased Saudi crude flows, the East-West Pipeline restart and hopes surrounding the Iran-Hormuz diplomatic opening — not to the Saudi pipeline alone. Reuters, 22 September.

This is becoming a middle-distillate problem

That may be the most important distinction in the energy market now.

Crude oil and refined products are no longer telling exactly the same story.

Saudi Arabia is beginning to restore an alternative crude route. Diplomacy could, in principle, reopen Hormuz. Both developments have helped crude prices ease.

But diesel remains exceptionally tight.

US inventories are at record seasonal lows.

US pump prices are at record highs.

European diesel supply is constrained.

European jet fuel is facing a projected fourth-quarter deficit.

Russian and Middle Eastern product availability remains disrupted.

American refineries are operating near their limits.

And now Washington is considering whether to restrict exports from one of the world's most important remaining diesel suppliers.

The problem is increasingly not simply:

Is there enough oil?

It is:

Can enough crude reach a functioning refinery, be converted into the right fuel specification, and then be transported to the market that needs it?

Those are very different questions.

What AmericasOilWatch is watching now

The first signal is US diesel-export policy. President Trump supports restrictions and Treasury is examining whether full or partial restrictions would work. No restriction has yet been implemented.

The second is US inventories and refinery reliability. At 107.9 million barrels of distillate stocks and refinery utilisation near the top of its recent range, an outage or heavy maintenance period would matter more than it normally would.

The third is Saudi East-West Pipeline throughput. Reaching 40% of capacity would be meaningful; returning toward the roughly 4 million b/d Saudi Arabia previously routed through the line would be more important.

The fourth is Hormuz traffic on a consistent measurement basis. OilWatch will continue to use the PortWatch series against its own 2023 baseline and keep Reuters, Kpler and Windward figures separate rather than mixing unlike counts.

And the fifth is US-Iran diplomacy. If the conditions conveyed in New York turn into an agreement and observable traffic begins to recover, the supply picture could change quickly. Until that happens, a diplomatic proposal is not a reopened strait.

The bigger picture

The oil shock is changing shape.

The first phase was dominated by the loss of physical routes and fear over crude supply.

The next phase is increasingly about replacement capacity.

Saudi Arabia is beginning to rebuild an alternative route around Hormuz.

Europe is trying to extract more middle distillates from its existing refineries.

Tankers are travelling farther to connect new suppliers with old customers.

And the United States — one of the countries the rest of the world has depended upon for replacement diesel — is now asking whether it can afford to keep exporting as its own stocks remain historically tight.

If Washington ultimately restricts diesel exports, the effect would not stop at the US border.

Europe would have to compete harder for replacement barrels elsewhere. Those barrels would travel farther. Freight and refining margins would matter more.

And the global shortage would increasingly be determined not by the amount of crude oil available, but by the amount of usable fuel that can actually reach the consumer.

That is the change AmericasOilWatch is watching.

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