High Diesel Prices Are Caused by a Refinery Bottleneck, Not Crude Supply—So the Administration Should Focus on Refining Capacity
Source: Mark Mazman. "What The Administration Can Do To Lower Gas Prices." September 23, 2026. thefederalist.com
The Gist
The author argues that sky-high diesel prices aren't due to a lack of oil, but because there aren't enough refineries turning crude into usable fuel—many have closed in recent years, and attacks on Russian refineries have made things worse. He suggests the U.S. government should quickly fix a flooded refinery, restart idle and shuttered refineries, and pressure Ukraine to stop bombing Russian oil facilities, rather than banning exports, which he says would backfire.
Conclusion
The Trump administration can lower gas/diesel prices in the short term by repairing the Joliet refinery, recommissioning idle and closed U.S. refineries, and applying political pressure on Ukraine to stop attacking Russian refineries—rather than banning exports or assuming a crude supply problem.
Premises
- Diesel prices are at all-time highs (national average $6.30/gallon, $8.00 in California), significantly raising costs for trucking, shipping, and rail.
- The core problem is a lack of refining capacity, not a lack of crude oil, since crude supply remains plentiful.
- Since 2020, 11 U.S. refineries have closed or been repurposed to renewables, removing about 900,000 barrels/day of capacity, and no major refinery has been built since 1977.
- International refinery capacity has also been reduced due to Ukrainian strikes on Russian refineries (over 1 million barrels/day lost) and closures/conversions in China, UK, and Germany.
- The Exxon Joliet refinery has been offline for a week due to flooding, removing 275,000 barrels/day from Midwest supply.
- Banning diesel exports would only provide short-term relief while creating international shortages and shipping bottlenecks that would raise prices elsewhere.
- Idle and closed U.S. refineries (in New Jersey, Nevada, Benicia, Los Angeles, Houston, Belle Chasse) could be recommissioned relatively quickly and cheaply, adding roughly 775,000 barrels/day of capacity.
Assumptions
- Recommissioning idle or closed refineries can be done quickly and at low cost, without major regulatory or logistical obstacles.
- Political pressure on Ukraine to stop attacking Russian refineries is both feasible and appropriate as a U.S. policy lever.
- The refinery closures since 2020 were primarily driven by market/regulatory choices (e.g., shift to renewables) rather than irreversible economic obsolescence.
- The current price spike is primarily a refining bottleneck problem rather than a demand-side or speculative pricing issue.
- The federal government has sufficient authority or influence to encourage refinery reopening and repairs without new legislation.