European Union officials are increasingly confident the US will hold off on a diesel export ban after Energy Secretary Chris Wright signaled he opposes the measure, easing fears in a region that sources about 50% of its diesel from the US. Wright said Trump has not endorsed a ban and that "we will not cease exports of U.S. diesel," while allowing there may be "some tweak in where diesel flows out of US refineries." The Irish energy minister said a ban is unlikely, though it would significantly affect the EU if imposed.

Trump said Sunday he is still looking at a ban "very seriously" and that "we may do it," while acknowledging it "can oftentimes lead to a little bit of an increase on gasoline for cars." US diesel hit a record $6.53 a gallon this month. Goldman Sachs, which calls a ban a very plausible scenario though not its base case, estimates each week of a ban would cut US retail diesel about 25 cents a gallon while storage has room, but once tanks fill, refiners would trim runs and each additional week would add about 30 cents a gallon to gasoline. Europe would pay roughly $3 a barrel more on wholesale diesel per week, with strategic stock releases offsetting about half of that.

The UK is privately lobbying the Trump administration for an exemption from any ban, relying on the US for roughly a third of its diesel imports, and Italy's energy minister will ask Wright about the potential ban on Tuesday. Europe's supply is already under pressure from disruptions around the Strait of Hormuz and attacks on Russian refineries. TotalEnergies CEO Patrick Pouyanne said Europe would have no alternative but to tap strategic reserves of refined products if a ban goes ahead, and called the discussion of a ban a bad idea.