US diesel prices stay near record despite Trump administration's supply measures

U.S. diesel prices have climbed to an average of $6.28 per gallon, a rise of roughly 70% since the conflict involving the United States, Israel and Iran began, according to motorist group AAA. The surge follows broader supply constraints caused by the wars in Iran and Ukraine, which have tightened global fuel markets.

The Trump administration has taken two steps aimed at easing the shortage. It urged allied nations to release emergency oil reserves and issued an executive order allowing the use of tax-exempt red-dyed diesel on public roads through the end of the year. The dyed fuel is chemically identical to standard diesel but is marked to indicate exemption from a 24.4-cent-per-gallon federal highway tax.

Industry response to the dyed-diesel initiative has been cautious. Retailers cite unclear tax obligations, logistical challenges and potential penalties for interstate transport as reasons for limited uptake. David Fialkov, a lobbyist for the National Association of Truck Stop Operators, said the administration was encouraging sales through non-traditional channels but that most reputable retailers were unlikely to participate. John Tirado, president of Summa Energy, described the plan as a temporary fix rather than a lasting solution.

A White House official clarified that the recent G7 agreement to release 100 million barrels of oil and petroleum products is intended to front-load diesel deliveries, though critics note that much of the volume reflects earlier emergency releases rather than new supply. The administration maintains that the measures are meant to address short-term disruptions while longer-term energy policies are pursued.

Analysts emphasize that the fundamental issue is a tightly constrained global market for refined products. Caspian Conran, lead economist at Baringa, said the actions could provide “a few weeks of relief” but would not resolve the underlying supply imbalance.