Last week’s announcement by several wealthy industrial nations, including the United States, to release diesel from strategic reserves aims to alleviate record-high fuel prices. However, this move also comes amid discussions within the U.S. government about potentially banning diesel exports, a decision that experts warn could have significant global repercussions.

The United States has become the world’s largest diesel exporter, with Latin America and Europe among its key markets. Concerns about a possible U.S. export ban have grown, especially in Latin America’s largest economies—Brazil and Mexico—as well as in other countries such as Chile and Ecuador, where right-leaning governments aligned with former U.S. President Donald Trump have risen to power. Within the U.S., some Republican lawmakers have advocated for an export ban as a response to rising domestic diesel prices.

Six of the top 10 destinations for U.S. diesel exports last month were in Latin America, according to energy tracking firm Vortexa. Brazil, the continent’s largest economy, recently became the leading importer of U.S. diesel—a shift accelerated by Russia’s extended restrictions on diesel exports following Ukrainian drone attacks on refineries. Diesel is critical to Brazil’s expansive agricultural sector and broader economy, where officials are exploring alternatives such as boosting imports from India, increasing domestic biodiesel production from soybeans, and expanding fuel subsidies under President Luiz Inácio Lula da Silva’s administration. Despite Brazil’s sizable refining industry, it currently lacks sufficient capacity to fully meet domestic diesel demand.

Mexico, the United States’ top trading partner, faces similar challenges. Efforts to reduce dependence on U.S. fuel imports through expanding domestic refining capacity have been hindered by technical delays and cost overruns. This leaves large parts of Mexico’s economy, especially industrial zones in northern states, vulnerable to supply disruptions if cross-border pipelines carrying U.S. diesel were to be shut off. Smaller Latin American nations are often even more exposed due to limited refining infrastructure, including Central American countries and Chile, where 88 percent of diesel imports come from the United States. Chile’s reliance on U.S. diesel is of particular concern following the election of José Antonio Kast, a pro-Trump figure.

European countries also stand to be affected by an export ban. After reducing purchases of Russian fuel amid the war in Ukraine, several nations increased reliance on U.S. diesel. The United Kingdom and the Netherlands are the largest European importers of American diesel, followed by France and Spain. The UK depends on U.S. supplies for roughly one-third of its diesel imports, while domestic refinery closures have further constrained local production. The Netherlands serves as both a consumer and a critical regional hub for storage and refining; a halt in imports could deplete inventories, disrupting river barge transport on the Rhine and causing secondary shortages across Western Europe.

Economists warn that such a ban may backfire on the United States. Philip K. Verleger compared the potential impact to President Richard Nixon’s 1973 temporary soybean export embargo, which unintentionally propelled Brazil’s ascendancy in global agriculture as Japan sought alternative suppliers. Experts caution that limiting diesel exports could encourage countries to diversify their supply sources or accelerate a shift toward renewable energy, thereby weakening the United States’ standing as a reliable energy provider on the global stage.

In sum, while releasing diesel from reserves may provide short-term relief for domestic prices, a potential U.S. ban on diesel exports risks significant economic harm to key trade partners across Latin America and Europe, as well as unintended long-term consequences for the U.S. energy sector.