Key facts
- The US national average price of diesel surpassed $6 a gallon for the first time on Thursday.
- Brent crude futures hit $107.63 a barrel, and WTI futures reached $102.48 a barrel, their highest levels since mid-May.
- Rising diesel prices are attributed to the US-Israeli war on Iran and Ukrainian attacks on Russian refineries.
- The Department of Labor noted that rising diesel costs accounted for over a third of the jump in producer prices in August.
- Diesel prices rose 24.1% last month, according to the Department of Labor.
The national average price for a gallon of diesel in the U.S. surpassed $6 for the first time on Thursday, according to price tracker GasBuddy. This surge in fuel costs is contributing to inflationary pressures and poses a political challenge for President Donald Trump and Republican lawmakers ahead of the November midterm elections.
Crude oil futures also reached their highest levels since mid-May, with Brent settling at $107.63 a barrel and West Texas Intermediate futures at $102.48 a barrel. According to AAA, the national average for diesel on Thursday rose to $5.98 a gallon, a 61% increase from $3.71 a year ago.
Experts attribute the rising diesel prices to the ongoing war in Iran, which has impacted global oil supply, and Ukrainian drone strikes on Russian refineries that have reduced refining capacity. Patrick De Haan, a petroleum expert at GasBuddy, noted that these factors have created a global squeeze on refining capacity. The Department of Labor reported that rising diesel costs accounted for over a third of the increase in producer prices in August, with diesel prices rising 24.1% last month.
Analysts at S&P Global Energy predict that global oil production may not return to prewar levels by the end of 2027. While consumers have largely been shielded from higher diesel costs due to existing contracts, economists like Thomas Ryan of Capital Economics suggest that businesses may begin passing these costs on to consumers if elevated prices persist for more than six weeks.