Is the world pricing the risk of a US diesel export ban?

Filed 44m ago · Via The Conversation · The Buffoon Desk

THIS STORY IS SCORED

I Knew a Guy

Kevin MacLeod · incompetech.com · CC BY 4.0

Photo: Dylan Drummond, Son of the Sea · CC BY-SA 4.0 · via Wikimedia Commons

A finance professor's analysis argues that a US ban on diesel exports, floated by Republican lawmakers from farm states and reportedly weighed by Trump, could temporarily lower domestic diesel prices by splitting US and world markets, while spiking prices for the rest of the globe. US diesel prices have topped $7 a gallon in parts of the West Coast, and September inflation rose 3.7% year-on-year, with gas prices driving over half the recent monthly increase.

The piece traces the shortage to Russia's July diesel export ban following Ukrainian strikes on its refineries, and to disrupted Middle East flows after February missile attacks near the Strait of Hormuz, which once carried over a fifth of global crude and gas output. The author's own research finds governments are more likely to restrict commodity exports when prices are high and elections are near, a pattern the current push for a US ban appears to fit.

The full dispatch is available from the source below.

✒ FROM THE EDITORIAL DESK

A ban that helps the person filling up at home by making the problem worse for everyone else isn't a solution, it's a cost transfer with good timing before an election. Trump touted falling fuel prices once and now the story's changed, so the fix on offer is to move the pain rather than shrink it. Export bans always look generous to the folks nearby and look like a shrug to everybody downstream.

Source: Read the original at The Conversation → Scored: I Knew a Guy · Kevin MacLeod · CC BY 4.0