CHICAGO — Diesel hit a record price in the U.S. on Friday, soaring to an average of US$5.85 a gallon for the first time as the six-month war with Iran disrupts the world’s flow of fuel. Because diesel is used for many freight and delivery networks, higher diesel prices mean higher transportation costs for a long list of everyday goods. Some businesses have already passed on costs to consumers in the form of added fees on online orders and packages in the mail. And shoppers may see more and more sticker shock trickle down to store shelves. One of the most immediate strains is being felt in the grocery aisle, particularly with produce, meat and other perishable foods that need to be hauled in and restocked frequently — or even harvested using diesel-powered farm equipment. It can take time for all of those costs to trickle down. Still, experts warn that price hikes could mount the longer diesel remains expensive. A range of other products are also transported by diesel trucks, trains and boats, including clothing, cosmetics and furniture. This could add to Republicans’ political challenges ahead of November’s midterm elections, with many voters already sour on President Donald Trump’s management of the economy and fallout of the war he launched. AP-NORC polling this summer showed 2 out of 3 U.S. adults disapproved of how Trump is handling the economy. The price for regular gasoline has also been going up, although not as fast as the price of diesel. The average price was US$4.15 a gallon, compared with US$3.20 at this time last year, according to motor club AAA, which says gas has never been above US$4 a gallon on Labor Day. What’s driving the latest jump for diesel American diesel prices are now nearly 56 per cent more expensive than they were before the U.S. and Israel launched their war against Iran in late February, when the national average sat at about US$3.76 per gallon per AAA. Prices quickly climbed as the cost of crude oil — the main ingredient in diesel, as well as gasoline — soared amid supply chain disruptions across the Middle East, notably with most tanker traffic bottlenecked in the key Strait of Hormuz. Despite prices cooling some during hopes for peace earlier in the summer, oil has now renewed its climb as fighting once more escalates between the U.S. and Iran. Brent crude, the international standard, was trading at more than US$95 a barrel Friday, up from roughly US$70 before the war. Prices at the pump always follow closely behind. The last time businesses and drivers saw sky-high fuel prices was in June 2022, when diesel reached nearly US$5.82 a gallon on average months after the Ukraine war began and world leaders imposed sanctions against Russia, a leading oil producer. When adjusted for inflation, however, prices have been higher in the past. Ahead of the 2008 financial crisis, for example, diesel hit about US$4.74 a gallon — equivalent to US$7.20 in 2026, according to the government’s latest data. And 2022’s record of nearly US$5.82 would be about US$6.56 this year when accounting for inflation. That doesn’t take the pain away from today’s steep prices, which are already bringing ripple effects for the economy and wider costs of living. Drivers are feeling the pain with gasoline, too. The average US$4.15 for a gallon of regular unleaded is up from US$2.98 before the Iran war (an over 39 per cent jump), although still well below the 2022 peak of nearly US$5.02 a gallon nationwide. Diesel has been more expensive than gasoline in the U.S. for decades, and its price has risen at a faster pace before. Some reasons include less flexibility in demand and diesel’s position in global commerce overall. Individual households may find ways to drive less when gas prices are high, for example, but there’s fewer immediate substitutes for networks that rely on diesel to haul goods worldwide. All eyes on food Diesel is integral to every part of the food supply chain. It powers farm equipment and fishing boats as well as the trains and trucks headed to grocery stores. Fuel accounts for roughly 15 per cent to 30 per cent of the total cost of food, according to the Independent Grocers Alliance, a grouping of 7,500 global supermarkets. So higher diesel costs often result in more expensive groceries, although it can take a while for energy shocks to wind their way through the supply chain. Items that need to stay refrigerated while they’re transported are often the first to see prices rise, according to David Ortega, a professor of food economics and policy at Michigan State University. In July, for example, overall U.S. grocery prices were up 2.7 per cent compared to a year prior, but seafood prices were up 7 per cent and fresh fruit prices were up 4.9 per cent. Ortega cautioned other factors can be at play, too. Lettuce also faced higher transportation costs in July, but a drop in demand due to the cyclospora outbreak caused prices to fall. Still, consumers could feel more of a squeeze the longer diesel prices remain high. “Early on, much of the cost increase gets absorbed along the supply chain through existing freight contracts and retailer margins,” Ortega said. “But as contracts reprice and fuel surcharges take hold, more of that cost makes its way to the grocery store.” More fuel shocks Back in April, e-commerce giant Amazon rolled out a temporary 3.5 per cent fuel and logistics surcharge on some third-party sellers. United Parcel Service, FedEx and the United States Postal Service also moved to add fees on some of the packages they ship earlier in the war, citing rising costs for fuel overall. Ajesh Kapoor, CEO and founder of trucking technology company SemiCab, said trucking and transportation can adapt to rising diesel prices — but at some point there is a limit. “Diesel price has a very, very direct impact on everything that moves on pretty much any mode,” Kapoor said. The ramifications extend beyond consumer goods. Some public transit buses and trains also run on diesel. And diesel generators are often used for backup or emergency power, if not central electricity sources in some remote parts of the world. Experts warn the consequences could continue to deepen, particularly in African and Asian countries, which rely more on Middle East imports and have already been hit the hardest by energy shocks. According to the latest data from Global Petrol Prices, diesel prices in Nigeria have surged 90 per cent since late February — followed by nearly 87 per cent in Indonesia and 77 per cent in Lebanon. Price tags vary widely between countries, due to factors ranging from fuel taxes to local economic conditions more broadly. Diesel prices in Nigeria ended August at US$4.91 per gallon (1,730 naira per liter) on average. Meanwhile, the highest sticker price reported by Global Petrol Prices was in Hong Kong, where diesel costs have jumped over 25 per cent during the war and averaged at US$17.73 a gallon (nearly 37 Hong Kong dollars per liter) Monday. At a weekly briefing with Lloyd’s List Intelligence, Neil Atkinson, energy analyst and senior fellow at the National Center for Energy Analytics, said products like diesel are becoming more expensive while physical stocks dwindle. He pointed to the strain on the global refining system. “This cannot go on forever,” he said. ___ Wyatte Grantham-Philips, The Associated Press Associated Press writers Dee-Ann Durbin in Detroit, Mae Anderson in New York and Bill Barrow in Atlanta contributed to this report.
