The US national average price of diesel has exceeded $6 a gallon for the first time ever, according to GasBuddy, a price tracking firm. This record high is attributed to the ongoing US-Iran conflict and Ukrainian drone attacks on Russian refineries, both of which have severely constrained global fuel supplies. This surge in diesel prices means that "every truck, every delivery, every package, every grocery run just got more expensive," as noted by GasBuddy analyst Patrick De Haan, who also warned that this will likely reignite inflation across the supply chain.
Diesel is a critical fuel for various sectors, powering trucks, trains, ships, heavy equipment, and farming machinery, making its price increase a significant concern for the entire economy. Since the US and Israel attacked Iran in late February, US diesel prices have jumped by nearly 60%, largely due to disruptions in shipping through the Strait of Hormuz, a vital oil chokepoint. The situation is exacerbated by Russia's diesel export ban and the operational downtime of several Russian refineries following Ukrainian attacks.
US diesel inventories are currently 13% below their five-year average, standing at 106.3 million barrels. Despite refiners operating at full capacity to capitalize on strong margins, US distillate inventories are near multi-decade lows for this time of year. Experts anticipate that rebuilding stockpiles will be challenging over the next two months due to seasonal refinery maintenance, and global diesel supplies are expected to remain tight, keeping margins elevated and volatile into early next year. Some California gas stations are already displaying diesel prices at the maximum $9.999 per gallon, with the state's average hitting $7.91, and the national average could realistically rise to $7 per gallon in the coming weeks.
