The Trump administration is considering options to contain the diesel price crisis amid political and economic pressure

The administration of US President Donald Trump is considering several options to contain the sharp rise in diesel prices, including imposing restrictions on exports, at a time when pressure is mounting within the Republican Party and the oil sector regarding the repercussions of the fuel crisis on the American economy, while several states have begun measures to reduce the cost of diesel and gasoline.

A Financial Times report quoted people familiar with the discussions as saying that the White House offered Trump options that included limiting diesel sales in foreign markets, while American officials informed European allies of the possibility of supply disruptions.

A White House official said that Trump is “evaluating all options presented” to reduce fuel prices domestically, without making a decision on suspending exports yet.

This comes after the price of diesel in the United States reached a record level of $6.53 per gallon last week, an increase of more than 70 percent from its level before the outbreak of the war with Iran, according to AAA data reported by Reuters. War-related supply disruptions, Ukrainian attacks on Russian refineries, and declining global inventories have tightened the diesel market.

Trump faces pressure from two sides: As Republican legislators push; Especially from agricultural states, there is an effort to limit diesel exports with the aim of increasing supply in the local market and reducing prices, while oil companies warn that restricting exports may lead to market turmoil and higher prices in American regions that depend partly on imported fuel.

According to the Financial Times, oil companies have intensified their contacts with the White House in recent days, while a number of members of the administration, including Energy Secretary Chris Wright, Interior Secretary Doug Burgum and Treasury Secretary Scott Besent, discussed the repercussions of imposing an export ban. ExxonMobil CEO Darren Woods also met with Wright at the White House on Tuesday.

Trump had previously said that he supported banning diesel exports, before the decision remained under discussion. Discussions show that the administration is also considering less direct alternatives, including expanding exemptions associated with the Jones Act, which could facilitate the transfer of fuel between US ports, easing some taxes, and allowing dyed diesel, which is exempt from most federal taxes, to be used more widely.

In parallel with the White House discussion, American states have already begun taking steps to reduce the cost of fuel. Reuters reported that several states suspended taxes on gasoline and diesel, and eased restrictions on the use of dyed diesel, usually reserved for agricultural machinery and off-road vehicles. Other states also resorted to amending fuel mixing rules or truck weights.

In Georgia, the state tax on gasoline and diesel was suspended for 30 days, along with an easing of weight restrictions for commercial vehicles. Indiana has suspended its sales tax on gasoline, while Alabama, Louisiana, Oklahoma and Texas have allowed diesel to be used on roads in broader conditions.

California also temporarily suspended summer gasoline blend rules, while other states eased restrictions related to transporting crops and fuel, in an effort to reduce the cost of transportation and supplies.

The repercussions of any potential restrictions are not limited to the local market. The United States has become an important supplier of diesel to global markets after supplies from other regions declined, while data showed that American diesel exports rose by more than 20 percent from last year’s levels to about 1.3 million barrels per day.

In Europe, the White House urged countries to draw on emergency diesel stockpiles to help ease global prices, while the administration continues to consider ways to increase supplies.

The crisis reflects a paradox in the American energy market: although the United States is the largest oil producer in the world and its refineries are operating at high rates, the disruption of global supplies has revealed the dependence of the American market on international trade in some types of fuel.

The price of Brent crude rose to $102.59 per barrel in Tuesday’s settlement, an increase of nearly 40 percent since the start of the war in February, which increases pressure on the oil derivatives market.

While restricting exports may increase the supply of diesel within the United States in the short term, wider restrictions may redistribute the shortage rather than eliminate it; Especially in light of the tight global refining capacities and the continuing supply disruptions.

The administration of US President Donald Trump intends to put forward plans to invest about $54 billion from the strategic package pledged by South Korea, to finance a liquefied natural gas project in Alaska and other American projects, according to two sources familiar with the discussions.

The Alaska LNG project is at the forefront of the proposed projects. It includes constructing a pipeline to transport gas from the northern slope of the state to a liquefaction facility on the southern coast, before exporting it to Asian markets.

The company developing the project (Glenvarney) is seeking to secure additional agreements to purchase gas to secure the necessary financing, after it announced in March that it had obtained commitments to purchase 13 million tons annually. The Japanese "Jera" and "Tokyo Gas" also signed preliminary agreements to purchase two million tons annually combined if the project is implemented.

The Alaska LNG plan has faced challenges for years related to the project's cost, financing, and commercial feasibility. These aspects have also been subject to studies by the governments of South Korea and Japan, making potential Korean investment a new source of financing for the project.

Seoul and Washington are working to identify projects that can accommodate the $350 billion strategic investment package, which South Korea pledged as part of a trade agreement last year. Discussions include, in addition to the Alaska gas project, nuclear energy projects and a gas power plant in Texas.

Kim Sung-won, an opposition lawmaker and head of the Trade Committee in the South Korean Parliament, said that the National Assembly will scrutinize the profitability of American investment projects and the financial risks associated with them, in addition to the direct benefits to Korean companies.

He added that US investments should be designed to achieve mutual benefit, expand markets for Korean companies, and enhance the stability of energy supply chains.

Trump has repeatedly promoted the Alaska project as a way to increase US energy exports and strengthen relations with Washington's allies, including South Korea and Japan.

Global bond markets are heading to end September with one of their worst months in years, under the pressure of deteriorating government finances, the intensity of issuance and high inflation, at a time when the US-Israeli war with Iran has kept energy costs high.

On the other hand, stock markets showed greater ability to withstand the jump in bond yields, with optimism continuing in Asian markets on Wednesday.

US Treasury bond yields for 10 years settled near their highest levels since 2007 at 5.2383 percent, heading to rise by about 50 basis points during September, in their largest monthly increase in about two years. Bond yields move inversely to their prices.

Two-year US bond yields fell slightly to 4.8889 percent after comments by John Williams, head of the Federal Reserve in New York, that reduced expectations for tightening monetary policy sooner, but were still higher by more than 50 basis points during the month.

Charu Chanana, chief investment strategist at Saxo, said that the movement of yields “exceeds the repricing of the upcoming central bank meetings,” noting that the markets are moving towards a system in which yields are characterized by structurally higher levels.

She added that returning returns sustainably to the very low levels that investors have become accustomed to after the global financial crisis has become more difficult.

In Japan, bond yields are hovering near multi-decade highs, while 10-year government bond yields in Germany and France this week hit their highest levels in 17 and 18 years, respectively.

Although the continued rise in risk-free yields increases the cost of refinancing companies and puts pressure on growth, its impact on stock markets has remained relatively limited so far.

MSCI's broadest index of Asia-Pacific shares excluding Japan rose 0.2 percent in early trading, heading for a monthly loss of just over 1 percent.

The Japanese Nikkei index rose 0.9 percent, and is heading to end the month with little change, while the South Korean Kospi index is heading for monthly gains of 1.4 percent.

Nasdaq futures rose 0.13 percent, Standard & Poor's 500 futures rose 0.16 percent, while Euro Stoxx 50 and DAX futures increased 0.5 percent each.

The resilience of stocks is attributed to strong corporate earnings, the cohesion of the global economy, and continued investment momentum around artificial intelligence.

Mohammed Abhay, head of trading strategy for the Asia-Pacific region at Citi, said that the reaction of stock markets to the rise in yields was more subdued than expected, with nominal GDP growth continuing to support earnings expectations.

In currency markets, the dollar is heading for monthly gains of approximately 2 percent, benefiting from the rise in US bond yields.

The euro traded near its lowest level in 16 months at $1.1336, heading for a monthly loss of 2.4 percent, in light of the repercussions of the global energy shock and the increase in political risks in Europe.

The British pound fell 0.03 percent to $1.3227, also heading for a monthly loss of about 2.4 percent.

The yen settled at 157.03 to the dollar, heading for monthly gains of about 1.7 percent, with investors reluctant to push the currency to weaker levels, amid fears of joint intervention from Tokyo and Washington.

In commodity markets, oil prices rose on Wednesday, and Brent crude rose 0.56 percent to $103.16 a barrel, while US crude rose 0.11 percent to $89.49. The two benchmarks are heading for monthly gains amid fears of continued supply disruptions due to the war in the Middle East.

Spot gold fell 0.2 percent to $4,171.93 an ounce.