Chevron (CVX) Chief Executive Officer Mike Wirth is warning against a ban on U.S. diesel exports, saying such a move could make matters worse for the energy sector and businesses.
In a media interview, Wirth said that banning U.S. exports of diesel would be “unwise,” saying it could negatively impact the global supply of the fuel and lead to even higher prices.
“Export bans, be they in the U.S. or in other countries, actually take supply off the global market and they run the risk of making the situation worse,” said the Chevron CEO.
Wirth’s comments come as U.S. President Donald Trump threatens to implement a ban on U.S. exports of diesel as the price of the fuel in America tops an all-time high of $6 U.S. per gallon.
The Iran war has severely disrupted shipping through the Strait of Hormuz waterway that typically handles 20% of the world’s crude oil, sending shock waves around the world.
Diesel fuel is widely used in commercial vehicles operated by farmers and trucking companies.
Trump succeeded in getting other G7 nations to agree to a release of their diesel and crude oil reserve supplies, which has helped lower prices in recent days.
The U.S. president has also allowed red-dyed diesel to be used more broadly as part of a push to bring down record-high fuel costs.
Red dye diesel is a standard diesel fuel mixed with a red coloring agent to show that it is exempt from highway excise taxes.
However, Chevron’s Mike Wirth took issue with the release of emergency fuel supplies ahead of winter, saying global inventory levels are getting depleted and that it is a “very serious” situation.
“We’re at much lower levels of inventory right now and it makes the system more vulnerable to disruption,” he said.
Some energy and commodity analysts say it could take up to two years to rebuild global oil inventories, warning that the squeeze on supplies could get worse as the Iran war continues.
The average retail price for diesel in the U.S. is at $6.20 U.S. per gallon on Oct. 7, near a record high.
CVX stock has gained 34% in the last 12 months to trade at $207.58 U.S. per share.
Related Stories
