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The Trump administration said it was not considering a ban on oil exports after industry bosses warned it not to panic by taking drastic actions to contain surging energy prices.
A Trump administration official said: “Oil and gas export restrictions are not under consideration.”
Ahead of a meeting between US vice-president JD Vance, congressional leaders and senior oil industry executives on Thursday, top shale bosses said any ban would hurt American producers and backfire on the administration’s strategy to push for more drilling.
“You can ban exports all you want, but it’s not going to affect the price of gasoline or diesel, which is based on a world price,” said Scott Sheffield, an oil industry veteran and former chief executive of Pioneer Natural Resources.
“So it’s going to hurt producers, which will have less cash flow but do nothing for consumers.”
The meeting with Vance comes as US petrol prices close in on $4 a gallon, up by almost a third since President Donald Trump and Israel launched the war on Iran on February 28. The sides have targeted energy assets in the Gulf since then. Brent crude surged to $115 a barrel in early trading, before slipping back to $111.96.
The surge in fuel prices threatens to further dent Trump’s popularity as his approval ratings on “cost of living” concerns have hit a record low in the lead-up to the November 8 midterm elections.
One industry insider, with knowledge of the Trump administration’s thinking, said the real concern was that “growing panic” within the White House about soaring oil and petrol prices would prompt them to consider a ban or other bad options. The industry would seek to extract a public commitment from Vance and energy secretary Chris Wright that a ban would not be introduced.
“As the prices go up and the walls close in, the administration will become increasingly desperate. I think that’s a fair approximation. Having nearly exhausted sound but marginal options, the temptation will be to reach for bad ones,” said the person.
Mike Sommers, the chief of lobby group the American Petroleum Institute, has also warned the administration against banning exports, saying it would cause widespread economic damage.
“Pulling American oil off the world market would further tighten global supply and could trigger cascading economic consequences for consumers,” Sommers said on X.
He said there were physical limitations to moving crude oil and petroleum products within the country and a ban on exports could create an oversupply in regions that produce, such as the Gulf Coast, and would do little for regions that import, like the east and west coasts.
Oil industry chiefs are hoping to win a renewed commitment from the White House on Thursday to rule out a ban, which they fear would damage the industry’s reputation as a safe and reliable supplier of oil, liquefied natural gas and other products.
Wright told CNN last week there had been no discussions within the administration about banning exports. But the industry remains nervous because the Trump administration previously said it was not considering releasing stocks from the strategic petroleum reserve before reversing course last week when prices rose higher.
The US banned crude oil exports for 40 years following the Arab oil embargo in 1973-74, a policy that was designed to insulate the country from energy supply shortages. But the shale oil boom, which transformed the US from being a net oil importer to a net exporter, persuaded policymakers to lift the ban in December 2015.
Democrats have slammed the administration’s decision to attack Iran, arguing they failed to adequately plan for the closure of the Strait of Hormuz — a waterway through which one-fifth of global oil supplies flow.
Scott Bessent, US Treasury secretary, told Fox Business Network on Thursday morning that the US could order a second release from the SPR to try to push down global oil prices and may lift sanctions in the coming days on Iranian oil stuck at sea.
He said the US is not intervening in oil futures markets, an option that the administration has previously considered.
The Department of Energy did not immediately respond to a request for comment.
Jason Bordoff, director of the Center on Global Energy Policy at Columbia University, said that banning exports was legally feasible but would probably backfire, offering limited relief to US consumers while imposing economic and geopolitical costs.
“Limiting exports would exacerbate fuel supply shortages abroad — particularly in Europe and Latin America — and could drive global prices higher, feeding back into US fuel costs,” he said in a blog co-authored by Neelesh Nerurkar, a global fellow at the centre.
