US diesel prices reached a record high of $6.5107 per gallon ($1.72 per litre) on Monday, the American Automobile Association (AAA) reported. This represents a 76% increase from the previous year, fueled by global supply disruptions and tensions in the Middle East. The national average has surged from $6.23 a week earlier and $5.58 a month ago, reflecting the escalating pressure on fuel markets.
The ongoing conflict between the US and Iran, coupled with disruptions in the Strait of Hormuz, has tightened supply. Additional uncertainty in Yemen and the Bab el-Mandeb Strait further complicates shipping routes for Saudi oil exports. These developments have heightened concerns about the stability of energy movements in the region, exacerbating the diesel shortage.
President Donald Trump is exploring various options, including potential military action or negotiations with Iran. He has also expressed openness to meeting Iranian President Masoud Pezeshkian during the UN General Assembly in New York. However, Iran’s Islamic Revolutionary Guard Corps has warned that further US aggression could lead to an expanded conflict and the deployment of additional weapons. Trump has also called on Ukraine’s President Zelensky to cease attacks on Russian oil refineries, asserting that reduced Russian refining capacity exacerbates the diesel shortage, a point he reiterated on Monday while referencing recent damage to Russian facilities.
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In parallel, the US has intensified economic pressure on Russia. Trump signed legislation targeting its energy and defense sectors, enabling tariffs of up to 100% on major Russian oil and gas buyers. This move aims to disrupt Russia’s energy and oil-shipping network, further straining global fuel supplies.
Diesel plays a critical role in the US economy, powering freight, agriculture, and heavy machinery. The surge in prices threatens to raise production and distribution costs, potentially contributing to broader inflationary pressures. This development follows the Federal Reserve’s decision last week to raise its benchmark interest rate by 25 basis points to a range of 3.75%-4%, the first increase since 2023, in response to persistent inflation.