President Trump says the White House is considering a ban on US diesel exports “very seriously”.
This is a huge threat, but behind the threat sits a problem no export ban can solve: the world can’t refine enough fuel.
A barrel of crude does nothing for a truck or a cargo ship until a refinery has processed it. Oil in the ground or on a tanker counts for little if the plants that turn it into fuel are damaged, shut or already running flat out.
Brent has hovered near $95 a barrel, broadly flat or lower since January, yet US diesel has hit an all-time high near $6 a gallon. With the raw material steady and the finished product soaring, the pressure is building inside the refining system.
Crude supply has been disrupted too, but refined fuel has taken the harder hit.
The IEA estimates Gulf crude export losses at just under 45%, while refined product and LPG exports from the region remain nearly 60% below February levels.
Refining capacity has been struck from several directions at once. Industry estimates suggest damage in the Middle East and Russia has knocked roughly 10% of global capacity offline.
Nearly 3 million barrels a day of Gulf refining capacity has been shut, and refiners elsewhere have cut runs over concerns about securing feedstock. A Russian refinery was hit on average once every three days in the first eight months of 2026.
Governments have tightened things further. Russia and China have both restricted fuel exports to protect their own markets, and Washington’s ban threat shows the same instinct spreading to the world’s biggest economy. Every restriction pulls refined supply out of the global pool when it’s scarcest.
The plants still operating can’t make up the gap. US refineries were running at 98% of capacity in mid-September. Global refinery throughput in August was 4.2 million barrels a day lower than a year earlier.
Stockpiles have covered the shortfall so far, with global oil inventories down 507 million barrels since February. Drawing on them can’t continue forever, and the IEA now describes the global refining system as stretched to the limit.
Refiners’ diesel margins broke through $100 a barrel for the first time in August and set fresh records in September, a level the market has never seen before.
Refining shortages are slow to fix. A refinery takes up to a decade to build, damaged processing units depend on specialist parts with long lead times, and closed plants rarely reopen.
With plants already running near maximum output as seasonal maintenance approaches, diesel supply could tighten further.
Few prices matter more to the global economy. Diesel moves freight by road, rail and sea, and it powers farm and mining machinery. When it jumps, the cost works through supply chains into food, materials and manufactured goods in every country.
The effect arrives with a lag, as freight contracts reset and suppliers pass costs on.
The EIA expects US diesel margins to stay above $2 a gallon through November before easing steadily through mid-2027, which puts much of the inflationary impact into next year.
Anyone expecting energy inflation to fade because crude has softened is watching the wrong gauge. As refined-fuel costs filter through economies, central banks everywhere will find the case for cheaper money harder to make.
Portfolios built around falling inflation and lower rates are exposed. Long-dated bonds tend to suffer when inflation proves stubborn, and rate-sensitive growth stocks struggle when cuts get pushed back.
Transport, aviation, chemicals, and discretionary retail absorb fuel costs more painfully than most sectors.
Inflation-linked assets, real assets, and commodities have historically held up better through energy-driven inflation, and many portfolios hold far too little of them.
Fuel-importing economies face an added strain. Bigger import bills widen trade deficits and weigh on currencies, making every imported barrel dearer still.
Portfolios concentrated in one region or currency have fewer places to absorb that kind of shock.
Piling into refiners carries serious risk too. Record margins can collapse quickly if conflicts ease, and the ban debate shows how fast politics can turn against the sector through export curbs, price caps or windfall taxes. Betting on prolonged war and political dysfunction makes a weak foundation for long-term wealth.
Diversification remains the most dependable defence against a shock of this kind.
Spreading exposure across asset classes, regions, currencies and sectors means losses in the parts of a portfolio hit hardest by fuel costs can be cushioned by the parts that hold up or benefit.
Energy exporters and importers tend to move in opposite directions during a fuel squeeze. So do the industries that burn diesel and those that produce it or offer alternatives to it.
Portfolios with exposure on both sides are far better placed than those built around a single outcome.
Nobody can say with confidence whether 2027 brings a ceasefire, a deeper supply crunch or another policy shock from Washington.
A properly diversified portfolio can stay invested through all of them without needing to call the outcome correctly.
The world’s fuel problem sits between the oilfield and the pump. Investors preparing for 2027 should be tracking refining capacity at least as closely as the oil price.
Nigel Green is deVere CEO and Founder
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