Peter Schiff Warns Record Diesel Prices Could Leave US Vulnerable To Next Energy Shock, Says Trump's Diesel Export Ban Could 'Backfire'

Economist Peter Schiff warned that record diesel prices and the depleted Strategic Petroleum Reserve (SPR) could leave the U.S. with less of an energy buffer during a future supply shock amid the Iran war. Diesel Ban May Backfire In a video released on YouTube by Schiff on Thursday, the Echelon Wealth Partners co-founder said that “We got to be getting close to a point where we can’t tap into the strategic petroleum reserve anymore,” adding that prices were really “going to skyrocket” Schiff then asked what would happen if the U.S. has to grapple with “the type of emergency that the strategic reserves were established to help us deal with?” He added that there were no reserves left. “We’ve used up all of our reserve on a non-emergency,” Schiff said. Schiff argued that a diesel export ban could ultimately reduce domestic diesel production, calling the SPR drawdown a “mistake.” Read Also: US Airlines Oppose More China-US Flights as Xi Jinping Pushes for Expanded Air Links: Report Soaring Diesel Prices He also pointed to soaring diesel costs. “It’s insane how high they are over there,” talking about California’s diesel costs, which reached $9.999/gallon in some places. “We were going to ban exports of diesel…because we need our diesel here,” the investor said. “But whenever the government does that, it generally backfires,” Schiff added. Notably, several oil producers and entities, including the U.S. Chamber of Commerce, urged President Donald Trump to rescind the plan to ban diesel exports, echoing Energy Secretary Chris Wright and Secretary of the Interior Doug Burgum‘s comments made earlier this week. Iran’s Parliament Speaker Issues Warning Amid the uncertainty, Iran’s Parliament Speaker Mohammad Bagher Ghalibaf mocked the Trump administration over rising U.S. Treasury yields. Ghalibaf also warned the U.S. that Iran could make Americans face gas shortages similar to the 1970s gas crisis. On the other hand, Iran’s Security Chief Mohsen Rezaee issued a warning to Iran’s neighboring countries against participating in the U.S.-led restrictions over Iran’s aviation sector. Rezaee added that the Strait of Hormuz will remain closed until the U.S. agrees to return to the conditions laid out in the Memorandum of Understanding (MoU). Oil, Gas Prices As diesel hits records, data from the American Automobile Association (AAA) on Friday, showed that the national average price of diesel was $6.5019/gallon, a slight decline from Thursday’s average of $6.5141/gallon. On the other hand, gasoline rose to $4.4918/gallon. California had the highest average gas price at $6.2882/gallon. The West Texas Intermediate (WTI) crude futures contracts expiring in November slipped 1.12% to $93.55 at press time. Brent futures contracts ending in November 2026 declined 0.50% to $106.07 at the time of writing this article. As oil prices slipped, ETFs tracking oil movement also showcased a decline. The United States Oil Fund (NYSE:USO) ETF fell 1.82% to $150.29 during pre-market trading on Friday. ProShares Ultra Bloomberg Crude Oil (NYSE:UCO) ETF also fell during pre-market trading on Friday, down 1.87% to $52.35. Read Also: Cathie Wood-led ARK Invest Says Oil Could Crash to $30-$35 Once Strait of Hormuz Reopens As Trump Touts Positive Iran Talks Check out more of Benzinga’s Future Of Mobility coverage by following this link. Photo courtesy: Shutterstock