Banning US diesel exports would lower diesel prices but push up the price of nearly every other fuel, according to Lipow Oil Associates president Andy Lipow.
"This is really a terrible idea," Lipow told Yahoo Finance (video above).
President Trump said Sunday he's "thinking very seriously" about a ban, though he's sounded less than sold on it as his team weighs options short of one.
The problem starts with Gulf Coast refiners, which "would have to figure out what to do with one and a half million barrels a day of diesel fuel that would no longer be exported," Lipow said. "So your choice is either to store it or not make it."
Storage would fill within weeks, he said, and refiners have said that "they would have to cut crude rates."
"Not only would they make less diesel," Lipow continued, "they make less gasoline, jet fuel, lube oils, asphalt, you name it."
Read more: Diesel export ban backed by Trump could result in 'unintended consequences,' experts warn
"That's why it's a bad idea," Lipow said, "because while diesel prices would go down, these other category of fuel prices would go up."
The damage would extend abroad and would hit "actually everybody," he said, from Mexico, "one of the largest importers of diesel fuel from the US, over 200,000 barrels a day," to South America and Europe.
"If prices of diesel absolutely skyrocket around the world, what I would be concerned about is driving those other economies into a recession," Lipow said, "ultimately dragging the US down with them."
Internal AI tools helped us analyze transcripts. Humans wrote and edited this post.