The average price of diesel fuel in the U.S. this week is $5.62 per gallon which is 53% higher than one year ago, according to AAA Motor Club. Gasoline is considered a “consumer” fuel, but diesel is the “workhorse” of the world economy. Farming, trucking, railroads, construction, heavy machinery, and more, all depend on diesel. These prices are at a near record high, only eclipsed briefly in 2022 at the beginning of the Russian “special military operation” in Ukraine.
Three big factors of the price rise include the closing of the Strait of Hormuz due to the Iran War, the drop in crude oil refining in the Middle East by 1.6 million barrels per day from 2025 levels, and the Ukrainian drone attacks on Russian oil refineries, according to the New York Times. Russia had been a significant exporter of diesel fuel, but has stopped all diesel exports due to insufficient domestic supplies. As one might expect, companies such as Marathon Petroleum or Valero Energy are showing double their profit margins in their second quarter earnings reports compared to the same period last year.
