U.S. retail diesel prices have surpassed $6.50 per gallon for the first time in history.
On September 20, Bloomberg reported that the American Automobile Association (AAA) recorded a national average diesel price of $6.505 per gallon. This marks an increase of more than 87 cents just in September, surpassing the previous record set in 2022.
The surge in diesel prices is primarily attributed to supply disruptions related to the Middle East and Russia. Following the U.S.-Iran conflict, shipping through the Strait of Hormuz, a key energy transport route, remains restricted, and oil shipments from the Middle East have not fully recovered to pre-war levels.
As a result, oil product production at refineries worldwide that depend on Middle Eastern crude is facing challenges.
Additionally, Russia's restrictions on diesel exports are exacerbating the supply crisis. Russia has largely banned diesel exports and is considering extending this ban until October. Attacks on Russian refineries by Ukraine continue, with a significant drone strike over the weekend damaging a refinery in Moscow.
While diesel is not widely used in passenger vehicles in the U.S., it is essential for freight trucks, agricultural machinery, generators, ships, trains, and home heating. Consequently, rising diesel prices could increase transportation and production costs, putting pressure on overall prices.
With the midterm elections approaching in November, the spike in diesel prices could pose challenges for President Donald Trump and the Republican Party. Voters in agricultural states like Iowa and heating oil-dependent states like Maine may feel the pinch of rising living costs.
However, the Washington-based think tank Institute for Progress noted that, when adjusted for inflation, current diesel prices are lower than the peak levels seen in 2022.
As diesel prices soar, there are speculations that the Trump administration may consider export restrictions to increase domestic supply. Earlier, Senate Minority Leader John Thune indicated that a ban on diesel exports could be on the table. However, U.S. Secretary of the Interior and Chair of the National Energy Regulatory Commission, Doug Burgum, stated that even if the U.S. were to ban diesel exports, it would not necessarily help lower domestic prices.
* This article has been translated by AI.
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