US diesel prices have climbed to a record high as global supply disruptions and instability in the Middle East put additional pressure on fuel markets.
The national average reached $6.5107 per gallon ($1.72 per litre) on Monday, according to figures cited from the American Automobile Association (AAA), compared with $6.23 a week earlier and $5.58 a month ago. The price is now approximately 76% higher than a year ago.
Supply conditions have tightened amid the conflict involving the United States and Iran and disruption to energy movements through the Strait of Hormuz. Developments in Yemen have also increased uncertainty surrounding shipping through the Bab el-Mandeb Strait and the movement of Saudi oil exports.
Further uncertainty surrounds Washington’s approach towards Iran. President Donald Trump said over the weekend that he was considering a range of options, including military action, economic measures or a negotiated agreement. He also indicated that he was open to meeting Iranian President Masoud Pezeshkian during the UN General Assembly in New York.
Iran’s Islamic Revolutionary Guard Corps has warned that another US attack could result in Tehran broadening the geographical scope of the conflict and deploying additional weapons.
Trump has separately urged Vladimir Zelensky to stop Ukrainian attacks on Russian oil refineries, arguing that reduced Russian refining capacity is contributing to the international diesel shortage. On Monday, he again referred to damage sustained by a number of Russian refining facilities.
At the same time, the United States has increased economic pressure on Moscow. Trump signed legislation on Friday targeting Russia’s energy and defence sectors and oil-shipping network, while allowing tariffs of up to 100% to be imposed on major purchasers of Russian oil and gas.
Diesel plays a significant role in the US economy because it is widely used for freight transportation, agriculture and heavy machinery. Sustained increases in diesel prices can raise production and distribution costs, potentially contributing to broader inflation.
The price increase comes as the Federal Reserve continues to address elevated inflation. Last week, it increased its benchmark interest rate by 25 basis points to a range of 3.75% to 4%, the first increase since 2023. Federal Reserve Chairman Kevin Warsh said inflation remained above desired levels and had persisted for an extended period.
Image credit: Rob Wingate
