Australia could face diesel rationing within weeks and prices above $4 a litre if the United States bans diesel exports, a leading energy analyst has warned, a serious risk for farming and mining, the ABC reports.

Saul Kavonic, head of energy research at MST Marquee, called the proposed ban "probably the most worrying development we have seen in global fuel markets since the [Middle East] war began when it comes to Australia's vulnerability". President Donald Trump said on Tuesday he backed calls by some Republican politicians to stop diesel exports; the US exports about 1.3 million barrels a day, a quarter of its refining output, and US prices have passed a record $US6.50 a gallon.

Kavonic said a severe ban could bring rationing "in a matter of weeks" and lift prices by 50%. Australia does not import diesel from the US directly, but it is exposed to the global market: "Australia is actually the largest importer of diesel in the world," he said, accounting for 1% of world fuel demand but 10% of seaborne diesel imports.

Refinery outages from the Middle East conflict and the Russia-Ukraine war, and halted fuel exports from Russia and China, have left the US filling the gap. Refiners' diesel margins, the crack spread, have widened, squeezing the slim margins of Australian farmers.

The Australian government is trying to secure supply from overseas partners, and the US midterm elections in November loom over the decision. The story was reported by Alison Branley.

Photo: Bob Nichols, USDA ARS / Wikimedia Commons (public domain)

Source: ABC Rural