NEW YORK -- The U.S. national average price of diesel on Thursday surpassed US$6 a gallon for the first time ever, according to price tracker GasBuddy, as the U.S.-Israeli war on Iran and Ukrainian attacks on Russia’s refineries have squeezed supply. Diesel fuels trucks, trains, ships and heavy equipment that keep global supply chains moving. It is also crucial to running farm equipment. The latest surge in fuel costs is adding to inflationary pressures that have already strained consumers and businesses this year, creating a political headache for U.S. President Donald Trump and Republican lawmakers as they seek to defend thin congressional majorities in November’s midterm elections. Crude oil is the biggest driver for fuel prices, and benchmark crude futures have climbed back above $100 a barrel on the intensification of conflict between the U.S. and Iran. Industries that depend on diesel were already feeling the impact when crude oil futures on Thursday hit their highest level since mid-May. Brent settled at $107.63 a barrel and West Texas Intermediate futures CLc1 at $102.48 a barrel. “Every truck, every delivery, every package, every grocery run just got more expensive,” GasBuddy analyst Patrick De Haan said on social media site X. “Record diesel prices will impact every cargo, shipment, every delivery Americans are taking, and are likely to reignite inflation up and down the supply chain,” he said. “In a span of five months, we’ve seen diesel prices more than double. It has rocked our cash flows,” said Alex Ryan, energy director at Kansas-based fuel supplier Oasis Energy. “There’s gotta be a tipping point, I just don’t know when or where it’s going to be,” he said. Farmers and ranchers are frustrated after enduring a series of cost shocks with little relief, said Arthur Erickson, CEO of agricultural drone company Hylio. Many faced mounting financial pressure as production costs surged while crop prices fell. Higher fuel and transportation costs could further stoke inflation ahead of the midterms, complicating Republican efforts to persuade voters that Trump’s policies are improving affordability. The White House said Trump remained focused on expanding U.S. refining capacity and lowering energy costs, arguing that oil and gas prices would fall as the United States maintains control of the Strait of Hormuz. “President Trump remains committed to unleashing American energy dominance, cutting costs, and putting more money back in the pockets of hardworking American families,” White House spokeswoman Taylor Rogers said. A Reuters/Ipsos poll last month found Democrats held an eight-point advantage over Republicans on which party had the better approach to the cost of living. Trump acknowledged on Wednesday that relief from the oil-price surge may not come until after the election. Diesel prices up almost 60% during war U.S. diesel prices have surged nearly 60 per cent since the U.S. and Israel attacked Iran in late February. The war has disrupted shipping through the Strait of Hormuz, which before the conflict carried roughly one-fifth of global oil supply. The market has been squeezed further by Russia’s diesel export ban, imposed as several refineries remain idle following repeated Ukrainian drone attacks. Restrictions on Chinese fuel exports are another factor that further tightened global diesel supply and pushed prices higher. U.S. diesel inventories stand 13 per cent below their five-year average, the Energy Information Administration said, at 106.3 million barrels. Stocks rose last week as refiners ran plants at full tilt to capture strong margins. The U.S. diesel crack spread HOc1-CLc1, a measure of refining margins, surged to a record high of $112.17 a barrel on Thursday, LSEG data showed. U.S. distillate inventories are near multi-decade lows for this time of year, even with refiners operating at high utilization rates, said Linda Giesecke, director of refined products at Rapidan Energy. It will likely be difficult to rebuild stockpiles over the next two months as seasonal refinery maintenance gets underway. “With global diesel supplies also remaining tight, diesel margins are expected to stay elevated and volatile into early next year,” Giesecke said. Reporting by Shariq Khan and Nicole Jao in New York and Jarrett Renshaw in Philadelphia; Writing by Liz Hampton; Additional reporting by Siddharth Cavale; Editing by David Gaffen and David Gregorio, Reuters
