The Trump administration is facing growing pressure to contain US energy prices, but Interior Secretary Doug Burgum said September 14 that restricting US oil, gasoline or diesel exports would be unlikely to lower costs for consumers. His comments come as the Iran war continues to influence energy markets and as elevated fuel prices create an increasingly important economic and political challenge ahead of the November midterm elections.

The debate highlights a broader question for energy markets: whether government intervention should focus on limiting exports or addressing domestic supply and refining capacity. Burgum’s comments suggest the administration currently sees the latter as a more effective route.

Export Restrictions Could Trigger Unintended Market Effects

Burgum said the administration would consider an export ban if there were evidence it could reduce prices, but argued that the measure would not achieve that objective. He warned that retaliatory restrictions by other countries could create new supply problems for US consumers, particularly in regions that rely partly on imported energy.

California was highlighted as an example of the potential complications. The state has already experienced refinery closures, and Burgum argued that further disruption to energy trade could exacerbate existing price pressures. California already has some of the highest gasoline and diesel prices in the United States, making the consequences of tighter supply particularly significant for consumers and businesses.

Record Diesel Prices Increase Political Pressure

The administration is operating against a difficult energy-price backdrop. US diesel prices recently climbed above $6 a gallon, with prices in California even higher. Diesel is particularly important to the wider economy because it powers commercial transportation, agricultural machinery, construction equipment and other industrial activity.

Persistently elevated diesel costs can therefore extend beyond the fuel pump, increasing transportation and logistics expenses and potentially feeding into prices for goods and services. With the November midterm elections approaching, energy costs have become an important economic issue for policymakers seeking to limit the impact of higher living expenses on households and businesses.

The challenge is complicated by the fact that reducing consumer fuel prices through policy intervention can involve trade-offs. Measures that restrict exports may increase domestic availability under certain circumstances, but they can also disrupt international supply relationships and encourage retaliatory actions that undermine the intended price effect.

Washington Considers Expanding Refining Capacity

Rather than relying primarily on export restrictions, the White House is considering how to use the Defense Production Act to expand US oil refining capacity. The Cold War-era legislation provides the federal government with mechanisms to support domestic production and critical industrial capacity during periods of national concern.

Additional refining capacity could address an important bottleneck between crude oil supply and finished fuels such as gasoline and diesel. However, expanding or reopening refining infrastructure is not an immediate solution. Capital requirements, regulatory approvals, environmental considerations and the time required to develop industrial capacity can limit how quickly additional output reaches consumers.

Energy Policy Remains Linked to Global Supply Risks

For global investors, the discussion illustrates how energy policy, geopolitical risk and domestic supply constraints are increasingly interconnected. US decisions affecting oil exports and refining capacity can influence international trade flows, regional fuel availability and the pricing environment faced by energy-intensive industries.

Looking ahead, markets will be watching whether the administration moves toward measures that expand refining capacity or introduces other interventions to address elevated fuel prices. Developments in the Iran war, refinery utilization, US petroleum production and international energy trade will remain important variables. The administration’s policy choices could influence not only domestic gasoline and diesel prices but also broader inflation expectations, transportation costs and the global energy balance. For investors in Israel and other energy-importing economies, changes in US energy policy may also affect global fuel markets and the wider inflation outlook.