President Donald Trump’s administration is pushing a 90-day ban on diesel exports to bring down fuel prices for American families. But the move could hit Texas refineries hard, and the state’s oil industry leaders warn that cutting off international buyers would hurt jobs, create fuel shortages at home and hand influence to China and Russia.
Texas produces about a third of the nation’s diesel, processing some 6.3 million barrels a day, according to the Energy Information Administration. About 1.5 million barrels of that diesel head overseas each day. The proposal aims to increase supply and lower volatile fuel prices amid the U.S.-Iran war.
On Monday, Gov. Greg Abbott issued a disaster declaration allowing the use of dyed diesel, which is functionally the same as diesel but reserved for farming and construction, to ease prices. The move is meant to free up more fuel for drivers and truckers at a time when prices are rising.
The CITGO Warning
CITGO, a major Texas refiner with operations in Lake Charles, Louisiana, and Corpus Christi, represents roughly 690,000 barrels a day of refining capacity. A CITGO spokesperson said an export ban “would eliminate outlets for approximately 1.3 million barrels-per-day of U.S. diesel and create a significant product containment challenge across the U.S. Gulf Coast, which supplies 90% of these exports.”
The company warned that cutting off overseas buyers would force Gulf Coast refineries to store excess diesel they cannot sell domestically. That storage pressure could eventually force plants to slow production or shut down units, reducing the overall supply of gasoline and jet fuel that Texans rely on.
The Texas Oil and Gas Association
Todd Staples, president of the Texas Oil and Gas Association, said the ban would do more harm than good. “Banning exports of diesel would cripple domestic jobs, lead to fuel shortages here at home and put power in the hands of China and Russia by forcing our allies to turn to those countries to meet their needs,” he said.
Staples framed the proposal as a gift to America’s rivals at a moment when the U.S. is locked in conflict with Iran. He argued that cutting off Texas diesel to other nations would leave them with fewer options than they had before the ban.
The Light Crude Argument
Ramanan Krishnamoorti, vice president of energy and innovation at the University of Houston, said most Texas crude oil is light crude, which turns into diesel and is the cheapest way to make gasoline. That means Texas refineries are already running at a natural advantage compared to plants that process heavier feedstocks.
Krishnamoorti also noted that Gulf Coast refineries have been operating at full capacity since the war broke out. With no room to expand output, he said, the system is already stretched thin.
The KBH Warning
Jack Balaggia, executive director of the KBH energy center at the University of Texas at Austin, said winding down operations would affect jet fuel and gasoline production. “It sounds like a simple problem and a very simple solution, but it is not. It is very complex … We live in a world market for crude oil and crude oil product, you cannot isolate yourself from the world market. Putting all rhetoric aside, it’s not going to work,” Balaggia said.
Balaggia’s warning echoes the CITGO position: cutting off exports would create a storage problem that could force refineries to slow or stop production entirely. The result would be less gasoline and jet fuel available for American drivers, not more.
The Abbott Move
Abbott’s disaster declaration allows dyed diesel to be used for transportation purposes, which effectively puts more diesel on the road at a time when prices are high. The move is separate from the federal export ban proposal, but it points in the opposite direction: using existing fuel rather than cutting off new supply.
The governor’s action shows how quickly state-level responses can move when fuel costs become a political issue.
The Numbers Behind the Debate
- Texas produces about a third of the nation’s diesel
- Texas processes about 6.3 million barrels a day of diesel
- About 1.5 million barrels of diesel are sold overseas each day
- CITGO operates roughly 690,000 barrels a day of refining capacity
- CITGO estimates an export ban would eliminate outlets for 1.3 million barrels a day
- The Gulf Coast supplies 90% of U.S. diesel exports
The Bottom Line
The administration’s proposal rests on the assumption that cutting off exports will increase domestic supply and lower prices. The industry’s counterargument is that the ban would reduce overall refinery output, shrink the workforce and make the U.S. more dependent on foreign suppliers.
The CITGO warning is specific and concrete: an export ban would eliminate outlets for 1.3 million barrels a day of U.S. diesel and create a storage problem across the Gulf Coast. The KBH warning is broader: the global market for crude oil and its products cannot be isolated, and a ban would not work.
The Texas Oil and Gas Association’s warning is blunt: the ban would cripple domestic jobs, create fuel shortages at home and hand influence to China and Russia. Abbott’s move to allow dyed diesel to be used for transportation is a temporary fix, not a structural change.
The administration’s goal is to lower prices before the midterm elections. The oil industry argues that the ban would achieve the opposite effect. By cutting off international buyers, refineries would face storage limits that force them to slow production, reducing the overall supply of gasoline and diesel available to Americans.
Where the paper stands
The paper backs Texas oil industry leaders who warn the 90-day diesel export ban could hurt jobs, create fuel shortages and hand influence to China and Russia, and is against federal agencies writing mandates that gather power over private businesses. The CITGO, KBH and Texas Oil and Gas Association warnings all point to the same danger: a ban would force refineries to store excess diesel they cannot sell, slow production, and shrink the workforce. The administration’s proposal treats the Gulf Coast as a supply valve for American consumers, but the industry’s experts say the system is already stretched thin and cannot absorb the loss.
The CITGO estimate of 1.3 million barrels a day of diesel losing outlets is specific, and the KBH warning that the global crude oil market cannot be isolated is broad. Both agree the ban would not work. Todd Staples framed the proposal as a gift to America’s rivals at a moment when the U.S. is locked in conflict with Iran. The administration’s goal is to lower prices before the midterm elections, but the industry argues the ban would achieve the opposite effect. Storage limits would force refineries to slow production, reducing the overall supply of gasoline and diesel available to Americans.
The governor’s move to allow dyed diesel for transportation is a temporary fix, not a structural change. It shows how quickly state-level responses can move when fuel costs become a political issue, but it does nothing to address the underlying threat to refinery capacity. The paper wants the administration to listen to the industry’s warnings and reconsider a mandate that gathers power over private business without solving the price problem it claims to fix.
Source material: “Trump’s proposed ban on diesel exports could have unintended consequences for Texas refineries,” Houston Public Media.
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