The U.S. national average price of diesel surpassed $6 a gallon for the first time ever on Thursday, driven by supply shocks from the U.S.-Israeli war on Iran, alongside Ukrainian drone strikes on Russian energy infrastructure that have heavily squeezed global refining capacity.
The transportation industry reached a painful new milestone as the national average for a gallon of diesel climbed to $5.98 according to AAA data, while real-time tracker GasBuddy confirmed the average surpassed $6 on Thursday, September 10. This marks a 61% increase from $3.71 a year ago. Fuel costs are adding severe inflationary pressure across supply chains, creating immediate economic hurdles for businesses and a major political test for President Donald Trump and Republican lawmakers ahead of November’s midterm elections.
Refining Squeezes and Global Conflict
Crude oil serves as the primary driver for fuel prices. Benchmark crude futures climbed back above $100 a barrel following the intensification of conflict between the U.S. and Iran, which disrupted shipping through the Strait of Hormuz—a maritime route that previously carried roughly one-fifth of global oil supply before the war began in late February. On Thursday, Brent settled at $107.63 a barrel and West Texas Intermediate futures hit $102.48 a barrel, reaching their highest levels since mid-May.
Beyond crude, a severe crunch in global refining capacity has caused diesel prices to outpace gasoline, which hovers above $4.28 a gallon. Ukrainian drone strikes on Russian energy infrastructure have sharply impaired Russia’s ability to refine oil and export diesel volumes. According to the Atlantic Council, Ukraine has significantly stepped up the volume of drone strikes on Russian refineries since the start of the year, creating a severe shortage. Restrictions on Chinese fuel exports and a Russian diesel export ban have compounded the global supply restriction.
“There’s just not enough diesel right now in Russia to export any volume of it, and that’s unfortunately a big problem for a global economy that sees almost every piece of heavy machinery needing diesel.”
Patrick De Haan, petroleum expert at GasBuddy, via CBS News
U.S. diesel inventories stand 13% below their five-year average at 106.3 million barrels, according to the Energy Information Administration. Although refiners ran plants at full tilt to capture strong margins—pushing the U.S. diesel crack spread to a record high of $112.17 a barrel on Thursday, according to LSEG data—analysts warn that rebuilding stockpiles will prove difficult as seasonal refinery maintenance gets underway over the next two months.
Cascading Costs Across Supply Chains
Economists note that businesses have largely absorbed higher energy expenses thus far, but that buffer is disappearing. Wholesale data released Thursday by the Department of Labor showed that more than a third of the jump in producer goods prices in August was attributable to rising diesel costs, which surged 24.1% last month alone.
“Every truck, every delivery, every package, every grocery run just got more expensive,”
Patrick De Haan, analyst at GasBuddy
“Record diesel prices will impact every cargo, shipment, every delivery Americans are taking, and are likely to reignite inflation up and down the supply chain,”
Patrick De Haan, analyst at GasBuddy
Oasis Energy energy director Alex Ryan noted that fuel prices have more than doubled over a five-month span, rocking company cash flows. Similarly, Arthur Erickson, CEO of agricultural drone company Hylio, described widespread frustration among farmers and ranchers who are enduring cost shocks while crop prices decline.
Consumer Impact and Market Outlook
While retail consumers have been largely shielded by existing supply contracts, experts warn that renegotiated agreements and upcoming fuel surcharges will force companies to pass costs downward. Thomas Ryan, a senior North American economist at Capital Economics, told CBS News that elevated energy costs are something households will have to weather over the remainder of the year.
Analysts emphasize that the trickle-down effect will alter retail prices unevenly. David Ortega, a food economist at Michigan State University, pointed out that perishable items transported long distances—such as fresh produce and seafood—remain highly vulnerable to logistics price hikes. GasBuddy analysts also warned that shoppers purchasing furniture or new automobiles could see steeper destination charges, while nonperishable items and locally sourced goods remain comparatively insulated.
Political fallout is mounting as voters grapple with cost-of-living pressures ahead of the midterms. White House spokeswoman Taylor Rogers stated that President Trump remains focused on expanding U.S. refining capacity and lowering energy costs by maintaining control of the Strait of Hormuz. Meanwhile, analysts at S&P Global Energy cautioned that global oil production may not return to prewar levels before the end of 2027, leaving diesel margins elevated and volatile into early next year.
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