Diesel prices in Canada are nearing record highs. A proposed U.S. export ban could push costs even higher

U.S. President Donald Trump has said he's considering a ban on diesel exports to improve gas prices for Americans, a move experts say would only push an already-strained global market —further raising diesel prices in Canada and abroad.

An already-strained market would face more pressure if Washington turns off the tap

Alexandra Mae Jones · CBC News

· Posted: Sep 24, 2026 6:55 PM EDT | Last Updated: 18 minutes ago

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U.S. President Donald Trump has said he's considering a ban on diesel exports to improve gas prices for Americans, a move experts say would only push an already-strained global market —further raising diesel prices in Canada and abroad. 

During a meeting with Ukrainian President Volodymyr Zelenskyy at a UN General Assembly on Tuesday, Trump said he's called for a diesel export ban.

"I've said, 'Let's not send out the diesel.' We make a lot of diesel. That could have a little bit of an effect on regular automobile gasoline," said Trump, whose fellow Republicans are facing pressure over gas prices going into November's midterm elections. 

U.S. Treasury Secretary Scott Bessent, who was on hand, said Washington is examining "whether it's feasible … and whether a full or partial ban would work."

And yet a White House official on Thursday denied a Politico report that the U.S. is actively preparing a 90-day ban of diesel exports, and U.S. Energy Secretary Chris Wright has said no one is considering a total ban. 

The idea is being floated amid already record-breaking diesel prices, driven up by the conflicts in Iran and Ukraine. The price of diesel in Canada has been above $2 per litre for the last 12 weeks, and was sitting at $2.66 a litre on Thursday, more than a dollar higher than this time last year.  

In the U.S., diesel prices have shot higher than $6.50 US a gallon, according to the American Automobile Association. Last year around this time, it averaged $3.69 US.

Experts agree that a U.S. ban on diesel exports would only throw the global market into further disarray. 

"This seems like a fairly hare-brained policy idea that kind of misses the mark on what the real challenges are right now," Joe Calnan, the Calgary-based vice-president of energy at the Canadian Global Affairs Institute, told CBC News. 

The U.S. exports around 1.5 million barrels per day of diesel, predominantly to Latin America and Western Europe, he said, and taking that out of the market suddenly would have the ripple effect of driving up prices across the board.  

A report from U.K.-based analytics group Wood Mackenzie said Europe would be particularly vulnerable as its share of U.S. diesel exports has been on the rise, surging to 50 per cent in September compared to a 30 per cent average in 2025. 

How it could impact Canada

A global price hike would include Canada, exacerbating ongoing problems, Calnan said. 

Diesel powers the trucks that ship food and goods across the country, and the tractors that harvest our food. 

WATCH | Farmers feeling the pinch:

High diesel prices mean an expensive harvest for P.E.I. farmers

September 23|

Duration

1:57

The price of diesel continues to climb and farmers on the Island are feeling it. They're getting hit particularly hard now as their machines roll through the fall harvest. CBC's Connor Lamont explains.

With farmers now in the middle of harvest season, the current price difference is already being felt. One Ontario farmer said earlier this month that the cost to fill his combine has jumped by $1,000 per refuel. 

Calnan notes diesel is also used for power generation in Canada's far north, and for home heating in the Maritimes, meaning a potential diesel price hike could be felt more broadly in those regions. 

"There will be impacts at the pump for diesel, [and] for those sorts of consumers," Calnan said. 

And yet, a U.S. export ban wouldn't mean a shortage of diesel in Canada, experts say — Canada produces much more diesel than it imports. In 2024, the country exported 10.8 billion litres. 

"We export almost two times more than we import, so Canada could get by without U.S. exports very easily," said Carol Montreuil, vice president at the Canadian Fuels Association.

"Pricing wise, it would be a different story."

Record-high prices

The war with Iran is one of the main factors lifting diesel prices. Before the U.S., together with Israel, initiated hostilities in February, the Strait of Hormuz handled around 125 commercial vessels a day, accounting for roughly 20 per cent of the world's crude oil and liquefied natural gas supply.

Ships have finally started moving through the strait again in recent weeks after months of closure, but it's still a trickle, with just 10 vessels transiting on Wednesday according to shipping data.

Conflict between Yemen's Saudi-backed government forces and the Iran-backed Houthis near the Red Sea's Bab el-Mandeb Strait, another key supply route, is also adding supply stress. 

Meanwhile, Russia, one of the biggest diesel exporters, has also extended a ban on diesel exports multiple times amid its ongoing war with Ukraine. 

Because of these conflicts, an estimated seven million barrels a day of refining capacity is out of reach, Montreuil said. 

"When you think of the world functioning on about 100 million barrels a day, removing seven million barrels per day, or around seven per cent of refining capacity, is a huge impact, and that impact is being felt on prices."

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Although keeping all U.S. diesel within the country would temporarily aid in gas prices for Americans, experts say it would eventually drive up their costs.

Patrick De Haan, head of petroleum analysis at Gas Buddy, says diesel prices in the U.S. may go lower at first. 

But then refineries in the U.S. would have to slow down production to avoid creating a diesel surplus once none was being exported. And with more diesel being redirected into storage, refineries would likely have to cut down on crude oil processing as well to make sure inventories don't go over capacity, ultimately impacting prices of regular gasoline.

"It would send a very chilling signal to U.S. refineries that the government is going to dictate what you can and what you can't do in terms of your supply," he said. 

• Farmers hit hard by high diesel prices — and unsure what the future holds

• ‘Very scary’: Nova Scotians feeling the pinch of rising home heating costs

ABOUT THE AUTHOR

Alexandra Mae Jones is a senior writer for CBC News based in Toronto. She has written on a variety of topics, from health to pop culture to breaking news, and previously reported for CTV News and the Toronto Star. She joined CBC in 2024. You can reach her at alexandra.mae.jones@cbc.ca