Goldman Sachs: If the US restricts diesel exports, it may initially lower diesel prices but push up gasoline prices

(1) Goldman Sachs estimates that the restriction of diesel exports by the United States is a "fairly reasonable but not baseline scenario" possibility. (2) If an export ban is implemented, in the initial stage when inventories are still sufficient, each week the ban continues may lead to a drop of approximately $0.25 per gallon in the average retail diesel price in the US, with a decline of less than 4%. (3) However, since diesel, gasoline, and jet fuel share refinery capacity, the longer the ban lasts, the more likely refineries are to reduce their operating rates, which would in turn push up gasoline prices. Goldman Sachs expects that for each week the ban continues, the average retail gasoline price in the US could rise by about $0.30 per gallon. (4) Meanwhile, restricted US diesel exports will tighten overseas supply, with each week of the ban potentially causing the wholesale diesel price in Europe to increase by about $3 per barrel, a rise of less than 2%. (5) Goldman Sachs believes that even if export restrictions are imposed, US diesel prices may eventually realign with overseas markets such as Europe.