Diesel prices in Nortrees, Texas, have surged due to international conflicts disrupting the global fuel supply chain. Prices are climbing as tensions in Iran affect shipping through the Strait of Hormuz, and Ukrainian attacks on Russian refineries have reduced fuel exports. These disruptions have led to increased diesel costs, impacting the U.S. industrial supply chain, according to petroleum analyst Patrick De Haan from GasBuddy.
As of now, the national average for diesel is $5.85 per gallon, up from $3.76 before the Iran conflict. This record high has not been seen since June 2022, highlighting diesel’s role in powering trains, tractors, and trucks, driving up transportation and farming costs. Higher diesel prices risk increasing costs for many sectors, including farming, transportation, and school districts, affecting budgets for school buses.
Inflation is already impacting consumers, with energy costs significantly rising, particularly hitting lower-income households, according to the Federal Reserve Bank of New York. The ongoing conflict with Iran since February has led to restrictions through the Strait of Hormuz, impacting petroleum product prices. Diesel has seen unique pressure due to constraints from refineries in Asia and damage to Russian refineries by Ukrainian attacks, decreasing supply.
The rising price of jet fuel also affects diesel production. Jamie Brito from Dow Jones Energy explains that refineries in the U.S. have shifted production toward jet fuel due to price incentives, reducing diesel availability. Diesel’s importance is evident, as it powers agricultural equipment and the transport of goods from farms to supermarkets. Seasonal factors, such as the fall harvest and winter heating, could keep diesel prices high. Diesel-powered heating oil, almost identical chemically, also sees similar price trends.
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