THE TANKER shipping industry has already faced a tsunami of disruptions this year. There could soon be another: restrictions or an outright ban on US diesel exports, coming on top of the Russian diesel export ban and the Hormuz crisis.

Even if US President Donald Trump opts not to move ahead with the proposal — a decision is expected within days — he might revisit the issue after the midterm elections, which are driving the current push.

The longer fuel price inflation from the Hormuz crisis and Russia-Ukraine war persists, the more likely that export bans arise, whether in the US or elsewhere.

A temporary ban or restriction on US diesel loadings would have significant effects on tanker rates, both negative and positive, depending on the vessel segment.

“What is for sure is that tanker shipping markets do not become more efficient from this,” said Fearnley Securities in a research note on Wednesday.

The seaborne volumes at stake

US seaborne exports of diesel and gasoil have averaged 1.4m barrels per day year to date, up 254,996 bpd or 22% versus the full-year 2025 average, according to Vortexa data as of Wednesday.

US YTD flows have comprised 18% of global seaborne diesel volume, up from 14% in 2025 due to the America’s role in substituting for lost Middle East Gulf and Russian cargoes.

Medium range two product tankers have transported the vast majority — 88% — of US diesel exports YTD, followed by long range two tankers with 5%, long range ones (2%), medium range ones (2%) and other tankers (3%).

Vortexa data shows that 62% of US diesel exports YTD have gone to South and Central America and the Caribbean, 24% to Europe, 9% to Africa, 2% to Asia, and 3% to other regions.

US diesel volume to Europe has risen the most in the wake of the Hormuz crisis, up 103,953 bpd versus 2025. Volume to Africa has increased 90,914 bpd. Volume to the leading market, Latin America, is up 23,380 bpd.

Mexico is the top country destination for US seaborne diesel in 2026 YTD, according to Vortexa data, accounting for 10% of the total, followed by Chile, with 9%; Brazil at 7%; Ecuador, France and Peru, each accounting for 6%; and the UK at 5%.

In addition, the US has imported 159,775 bpd of diesel YTD, according to Vortexa data, 85% arriving at US east coast ports, of which 88% is shipped from Canada.

The US has also imported 2.4m bpd of seaborne crude this year, which it refines into products including diesel. Venezuela is now the largest supplier, accounting for 20% of US seaborne crude imports YTD, followed by Canada (13%) and Mexico (11%).

Product tanker rate consequences

The most direct shipping consequence of a US export ban would be an abrupt collapse in demand for MR2s positioned in the Atlantic basin, presumably preceded by a spike prior to the deadline as cargoes rush to exit.

The question then becomes: would there be enough diesel from other sources to replace lost US cargoes, and to the extent there is, how does that affect tonne-miles and the cargo split between MRs and LRs?

According to Fearnley Securities, “A potential ban would initially be negative for MR Atlantic freight rates, while LR2s could get a boost as demand for long-haul volumes from the MEG or the Far East heading into Europe and South America would increase.

“For the market to be ‘saved’, we would need to see increased runs in the Middle East and Far East, which over time would be supportive for both MRs and LRs. Volumes do not need to be fully replaced in order to support shipping due to tonne-mile effects.”

Clarksons Securities said in a research note on Wednesday: “Replacement barrels would generally travel much farther, while Asia trade flows could also reshuffle.

“Chinese replacement cargoes, for example, could travel more than twice as far as the displaced US barrels. If China, South Korea and India replace around 700,000 bpd of lost US supply, the negative tonne-mile impact could be almost fully offset.

“US Gulf employment would face the clearest initial pressure, but the impact on global product tanker demand could be smaller than the headline loss of US export volumes suggests,” wrote Clarksons.

But it is not assured that there will be enough replacement supply to fill the gap.

George Sakellariou, freight analyst at Signal Ocean, told Lloyd’s List: “Cracks would skyrocket [outside the US]. However, as it stands, there doesn’t seem to be much replacement diesel available to export, other than from China and perhaps India.

“The question is whether China would fill the gap by increasing exports. This depends on price levels. In the event that diesel prices spiked globally, there is a chance that China would continue to prioritise internal security and keep product quotas as is. This is potentially also the case for India.”

Another possible consequence with shipping implications: US restrictions on diesel exports could force more strategic petroleum reserve releases from the EU. FGE Nexant said in a research note that an “increased likelihood of a EU SPR release” could lead to “more Asian diesel headed to Latin America”.

Meanwhile, there could be some replacement business for MR tankers stranded in the Atlantic if the US were to expedite Jones Act waivers for coastwise trades.

New England would face the largest challenge from a US diesel export ban. Pipeline infrastructure for diesel does not extend beyond the mid-Atlantic, ergo New England’s imports of Canadian seaborne crude.

The America Petroleum Institute — which warned that an export ban “could be catastrophic” and “would wreak havoc both here and abroad” — noted that “the west coast produces enough diesel to meet its own demand; the east coast, in contrast, lacks sufficient refining capacity and relies in part on diesel supplied from elsewhere, including imports”.

A US ban or restriction on diesel exports would increase diesel pricing outside of the US, which would hike diesel pricing in the northeast due to higher costs for Canadian imports, creating political pressure to move more diesel refined in the US Gulf on coastwise tanker trades to the east coast.

Crude tanker rate consequences

US diesel export restrictions would have positive implications for crude tanker rates, assuming they do not precipitate global demand destruction for diesel.

Very large crude carrier rates remain at unprecedented and stratospheric levels, although they appear to have hit a ceiling. The Baltic Exchange’s West Africa-China VLCC index was at $509,327 per day on Wednesday, down 3% from the all-time high reached on Monday.

Traditionally, the VLCC rate ceiling during geopolitical crises is set by the crack spread, the margin between crude and products.

If a new US policy increases the price of diesel in Asia at a higher pace than crude pricing, importers would have more room to pay for VLCC freight, pulling up the rate ceiling.

There could also be more US crude available for export.

US refiners have been running at over 90% utilisation to take advantage of the current boom, delaying maintenance. They are producing considerably more diesel than the US consumes; the US is not short of diesel. According to the Energy Information Administration, US diesel consumption has averaged 3.8m bpd YTD. Restricting 1.4m bpd in exports would reduce diesel refining requirements by 27%.

According to a report released by the Atlantic Council on Tuesday, “US refineries are likely to react to the expectations of a lower domestic price of diesel. Even under a ban that lasts only a few weeks, some US refineries might consider reducing crude throughput. If diesel prices are suppressed, these refineries may undertake long-delayed and sorely needed maintenance.”

More refinery maintenance opens the door to more US crude for export, at the same time as US West Texas Intermediate crude pricing could be pressured by lower refining demand.

“The obvious result would be that more WTI would become available for export. This would be beneficial for the Atlantic crude tanker market for both suezmaxes and aframaxes,” explained Sakellariou.

Yet another positive consequence for crude markets involves the back-and-forth switching of coated tankers between the aframax crude and LR2 products trades, depending upon profitability.

As noted by Fearnley and Clarksons, US diesel export restrictions would increase demand for LR2 product tankers on Pacific basin-to-Atlantic basin trades. But Fearnley also pointed out: most LR2s “are dirty” — they’ve switched to aframax mode given higher profitability of crude trades amid the Hormuz crisis.

That could change if the US implements diesel export restrictions that boost LR2 demand, which could pull tonnage away from the aframax sector toward the LR2 sector, ultimately benefiting aframax rates.

“Since LR2s trading clean are at the lowest percentage in recent years as compared to those trading in the aframax sector, there would be more demand for them for potential increased east-west runs, so some would convert back to the LR2 trade,” Sakellariou told Lloyd’s List.

But it’s not all positive for aframaxes. There is the supply-demand balance plus from a potential switch to LR2 trades, and the potential upside from higher US crude exports to Europe, yet there is also a possible negative on the import front.

Most of the crude shipped to the US from Venezuela, Canada and Mexico is carried by aframaxes. If US refineries are forced to ratchet down throughput due to lower overall diesel demand (including domestic consumption plus exports), they would not need as much imported crude loaded on aframaxes.