The proposed ban on diesel exports from the United States is likely to have the greatest impact on Latin American countries. According to a report published by Goldman Sachs, these countries are heavily reliant on diesel imports from the United States, and if these exports are halted, they will face serious challenges.
Latin American Countries' Dependence on U.S. Diesel
Goldman Sachs has stated that U.S. diesel imports account for up to 50 percent of the fuel consumption in Mexico, Ecuador, Chile, and Peru. This high dependence makes these countries extremely vulnerable to any disruption in exports. It is expected that if the ban is implemented, there will be further economic impacts on these countries, particularly in terms of prices.
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Impact on Economic Growth and Global Market
According to Goldman Sachs' estimates, the diesel export ban could reduce the collective economic growth of Latin America by up to one percent. While the effects on supply may put pressure on prices, they will be somewhat mitigated by a shift to other exporters. Given that the Middle East, the largest diesel exporter, is not yet fully operational, these concerns are heightened. Additionally, Russia has recently extended its diesel export ban, and President Vladimir Putin has stated that Russian diesel will not return to international markets until sanctions are lifted.
Meanwhile, China has also exacerbated global diesel issues by suspending fuel exports this month. Although the diesel export ban from the United States is not yet certain, President Donald Trump announced last week that discussions are ongoing daily. He also indicated that this ban could negatively impact gasoline prices.
However, Trump has not yet ruled out the idea of an export ban, especially as retail diesel prices in the United States have risen to $6 per gallon for the first time and then to $6.50. He has also threatened to ban exports to France and Germany if part of the diesel reserves is not released. These two countries alone hold 35 percent of the European Union's strategic diesel reserves.
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