US diesel tops $6.50 a gallon as wars worsen global crunch

Retail diesel prices in the United States have surged past the $6.50 mark per gallon, marking the first time this has occurred. This surge is attributed to the ripple effects of ongoing global wars impacting the fuel market. The average nationwide price has risen to $6.505 as of Saturday, according to the American Automobile Association.

Increases in prices have accelerated, with a notable gain of over 87 cents in September alone, surpassing the peak set in 2022. The constrictions on global supplies of diesel fuel are primarily due to the US-Iran war, which has resulted in limited shipments through the Strait of Hormuz. Additionally, the war has caused a lag in the recovery of crude oil shipments from the region, reducing production at refineries worldwide.

Russia has also imposed restrictions on most diesel fuel exports, with potential extensions through October, compounded by ongoing Ukrainian drone strikes that target Russian processing facilities. While most American drivers do not use diesel fuel in their cars, it is a critical component of the economy, powering trucks, agricultural machinery, power generators, boats, trains, and home-heating systems.

As midterm elections approach, the high diesel prices may negatively affect the support for President Donald Trump's Republican Party in states such as Iowa, which relies heavily on agriculture, as well as states that depend on home-heating oil, such as Maine. Despite the high prices, there is some relief as, on an inflation-adjusted basis, diesel prices are still below their 2022 highs, according to the Institute for Progress, a Washington-based think tank.

The rising diesel prices have led to speculation that the Trump administration might implement export curbs to maintain fuel availability. However, Interior Secretary Doug Burgum, who leads the National Energy Dominance Council, has refuted the notion that a US ban on shipments would lower prices.