U.S. diesel price tops $6 per gallon as supply constraints tighten
The national average price of diesel in the United States rose above $6 a gallon for the first time, driven by geopolitical tensions and limited inventories.
The U.S. average diesel price exceeded $6 per gallon on Thursday, according to price-tracking firm GasBuddy. The increase follows heightened geopolitical risks, including the conflict involving the United States and Iran and Ukrainian attacks on Russian refineries, which have reduced global diesel supplies.
Crude oil futures also rose, with Brent crude settling at $107.63 a barrel and West Texas Intermediate at $102.48 a barrel, levels not seen since mid-May. Higher oil prices are the primary factor behind the surge in diesel costs.
"Every truck, every delivery, every package, every grocery run just got more expensive," GasBuddy analyst Patrick De Haan said on X.
De Haan added that the record diesel prices are likely to raise costs across the supply chain and could reignite inflation. U.S. diesel prices are about $2.30 higher than a year earlier.
The Energy Information Administration reported diesel inventories at 106.3 million barrels, roughly 13% below the five-year average, though stocks rose last week as refiners increased output.
"The diesel situation is continuing to be more bullish by the day. Russian diesel exports, or lack thereof, continue to be the biggest factor in the market," said Alex Hodes, an analyst at StoneX.
Hodes also noted that recent escalations by the Houthis could affect diesel exports from Saudi Arabia's Yanbu port, which handles 400,000 to 500,000 barrels per day.
The higher fuel costs are adding pressure on consumers and are becoming a focal point in the upcoming midterm elections, where both parties are emphasizing affordability concerns.