The main transportation fuel tops $6.50 a gallon as conflicts in Iran and Yemen add to global supply disruptions U.S. diesel prices climbed to a new all-time high as disruptions to global fuel supplies and tensions in the Middle East continued to squeeze the market. The national average hit $6.5107 a gallon ($1.72 per U.S. liter), up from $6.58 a week ago.
Diesel now costs about 76% more than it did a year ago. The global diesel shortage has been exacerbated by the US war with Iran and disruptions to energy flows through the Strait of Hormuz. The Houthi advance on Yemen’s Red Sea coast has added further uncertainty, raising concerns about shipping through the Bab el-Mandeb Strait and Saudi oil exports. Supply concerns have intensified as US President Donald Trump weighs his next steps towards Iran.
Over the weekend, he said he was considering options ranging from military action to economic pressure or a deal, while indicating an openness to meeting with Iranian President Masoud Pezeshkian during the UN General Assembly in New York. Iran’s Islamic Revolutionary Guard Corps has warned that another US attack would prompt Tehran to use new weapons and expand the geographical scope of the conflict.
Trump also pressured Vladimir Zelensky to end Ukrainian strikes on Russian refineries, arguing that the attacks were exacerbating a global diesel shortage. On Monday, he again pointed to the damage to Russia’s refining capacity, saying that many facilities had been taken out of operation. At the same time, Washington has tightened sanctions on Moscow. Trump signed legislation on Friday targeting Russia’s energy and defense sectors and oil transportation network while authorizing tariffs of up to 100% on major buyers of Russian oil and gas.
Diesel is essential to the U.S. economy, powering much of the country’s freight transportation and farm machinery. Higher prices would then eat into the cost of transporting and manufacturing goods, adding to inflationary pressures. READ MORE: Trump blames Zelensky for rising gas prices The hike comes as the Federal Reserve battles persistent inflation. Last week, it raised its benchmark interest rate by 25 basis points to 3.75%-4%, its first hike since 2023. Fed Chairman Kevin Warsh said U.S. inflation remains too high and has remained too high for too long.