Diesel prices have hit an all-time high as the wars in Iran and Ukraine disrupt global fuel supplies.
On Friday, the average price of diesel in the United States reached $5.85, surpassing the previous all-time high of $5.81 per gallon set in May 2022 following Russia’s invasion of Ukraine. The national average was $5.29 per gallon last month and $3.70 a year ago, according to AAA.
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High diesel prices reflect the crimp on the global supply chain due to the conflicts in the Middle East and Ukraine.
Earlier this summer, Russia halted its diesel exports, with plans to extend its ban through September. There have also been discussions to extend the ban until the end of the year, Reuters reported.
Russia is typically responsible for 1 in 9 barrels of diesel produced globally, according to GasBuddy analyst Patrick De Haan. Russian refineries have also been damaged by Ukrainian drone strikes.
Refineries across the Middle East have also sustained damage, and the war in Iran has disrupted fuel shipments through the Strait of Hormuz. As a result, global oil prices have also increased as ships are unable to move through the waterway.
U.S. refineries have ramped up their production of diesel to ease supply chain disruptions by operating at 97% of their capacity.
Diesel is critical for the economy, as it is used to power trains, trucks, and other heavy machinery. It is also essential to the agricultural sector because it fuels farm equipment.
Diesel fuel accounts for 3% to 5% of the costs for U.S. farmers producing wheat, corn, and other major crops.
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“Diesel prices have skyrocketed since Trump started his war with Iran,” Sen. Mark Kelly (D-AZ) wrote on X. “Diesel fuels our supply chains and powers our farms and food production. Even if you don’t use diesel, those higher costs get passed on to you, making the food on your table more expensive.”
