- Chevron CEO Mike Wirth told CNBC that a U.S. diesel export ban would be “unwise,” saying it could worsen supply pressures and undermine confidence in the U.S. as a reliable energy supplier.
- Global supply fears have eased following higher Middle East crude exports and a G7 emergency stockpile release, but markets remain on edge as the U.S.-Iran war drags on.
The chief executive of U.S. oil giant Chevron on Wednesday warned it would be “unwise” for the Trump administration to move forward with a diesel export ban, saying the policy runs the risk of making the supply situation worse.
“The U.S. has been a reliable supplier to the world at a time when it needs it,” Chevron CEO Mike Wirth told CNBC’s “Squawk Box Europe” in an exclusive interview on Wednesday.
“And I think it would be unwise for the U.S. to create questions in the minds of our allies and our partners as to whether or not we will be there with reliable supply when times are difficult — and so, there are other options,” he added.
His comments come as rising Middle East crude exports and an emergency G7 stockpile release appear to have helped to ease supply fears, although energy market participants remain on edge as Saudi Arabia and Iran-backed Houthi forces exchange attacks.
The U.S.-Iran war has severely disrupted shipping through the Strait of Hormuz, a narrow waterway that typically handles around 20% of the world’s oil and liquefied natural gas supplies, sending shock waves through the global economy.
U.S. President Donald Trump, who has cooled on the prospect of authorizing a diesel export ban after G7 countries agreed to release diesel and crude oil from their emergency reserves, recently allowed the use of cheaper red-dyed diesel to be used more broadly in part of a push to bring down record-high fuel costs.
Trump signed an executive order Monday evening stateside to temporarily allow truckers and farmers to use red-dyed diesel — which is exempt from highway fuel taxes — and deferred related taxes on the fuel through the end of this year.
The tax-free diesel is typically used by farm equipment, construction machinery, trucks and other off-road vehicles. It is therefore exempt from a 24.4-cent-per-gallon tax applied to diesel fuel sold for highway transportation.
Saudi Aramco CEO Amin Nasser said earlier this week that it could take up to two years to rebuild global oil inventories, warning that the squeeze on supplies could yet get worse as the U.S.-Iran war drags on.
— CNBC’s Anniek Bao contributed to this report.
