Diesel Prices Hit All-Time High in US Amid Middle East Tensions and Inflation Average diesel prices in the United States have surged to a record high due to the war with Iran and rising inflation.
According to the US price tracking company GasBuddy, the national average diesel price has crossed $6 per gallon for the first time in history. Last week, the average price was at a record level of $5.85 per gallon, which has now been surpassed.
The unprecedented hike is directly linked to the escalating conflict in the Middle East and the sharp rise in global crude oil prices. Tensions in the Middle East have pushed international oil markets sharply higher. Brent crude has climbed to $108.68 per barrel, while Murban crude, the UAE’s flagship grade, has surged to $122 per barrel.
Analysts say several factors are driving the crisis. Since the US-Iran war began, shipping through the Strait of Hormuz, which carries about 20% of the world’s oil, has been severely disrupted. This has forced global refiners to scramble for alternative supplies. Saudi Arabia’s key 1,200-km East-West pipeline, which was being used to bypass Hormuz and export 4 to 5 million barrels per day via the Red Sea, was temporarily shut down after drone attacks last week. Saudi Aramco has since delayed cargoes to Europe, tightening diesel and crude supply.
At the same time, the Houthi seizure of the Perim Island near the Bab el-Mandeb strait has increased the risk premium for tankers moving through the Red Sea, raising freight and insurance costs.
The diesel spike is expected to have a major impact on the US economy, as diesel fuels trucking, farming, construction and freight rail. Higher transport costs are likely to push up prices of consumer goods and food, adding to inflationary pressures that were already building.
The US Energy Information Administration (EIA) has warned that if Middle East tensions persist and refinery output does not recover, diesel prices could remain above $6 for weeks, with California and the West Coast seeing prices as high as $7 to $8 per gallon.
Read also: Oil Prices further rise amid US-Iran Tension
