Oil executives thought they'd beaten back a diesel export ban. Then President Donald Trump opened his mouth at the United Nations — and sent the industry into a full-blown panic.
On "the sidelines" of the U.N. General Assembly in New York on Tuesday, Trump said he's considering restricting diesel exports as prices hit record highs just weeks before the midterms, according to the Wall Street Journal.
The comment "blindsided" oil executives, including some Trump donors, who believed they'd already won the fight to keep shipments flowing, and lobbyists reportedly scrambled to call White House officials and congressional Republicans to register their objections. It didn't matter — insiders now say some form of export limit looks "inevitable," the Journal reported.
"I think we've invested too much in developing customers overseas, and this is the wrong signal," Dan Eberhart, CEO of oil-field services firm Canary and a Trump donor, told the Journal.
According to the Journal report, "Even if the measure is temporary, U.S. oil companies stand to lose billions of dollars in revenue if they aren’t allowed to ship diesel abroad."
Trump is giving every indication that he is siding with vulnerable Republicans over his own oil-industry allies: Iowa Republicans, including Sen. Chuck Grassley, have pushed hard for a ban, arguing "sky-high diesel costs" are crushing farmers. A White House official said Trump "wants to see gas prices at the pump fall and is evaluating all options on the table."
One energy consultant with ties to refiners told the Journal, "It's all hands on deck. But it doesn't matter. We're not debating policy anymore. They've got to win a couple of key Senate races. The only way to do that is to put the export ban in temporarily."
Industry officials warn the move could backfire by spurring "international prices for the fuel to skyrocket" and lead to "retaliation' from other countries — the kind of unintended consequences that have already drawn scorn from Wall Street Journal's own editorial board.
