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The national average price of diesel reached $5.85 a gallon on September 4 according to AAA data that surpassed the prior record of $5.8159 set in June 2022 when Russia’s invasion of Ukraine first roiled energy markets. Prices have climbed $2.09 since the conflict with Iran began in late February and stand $2.14 higher than a year earlier when the average was $3.71 the Wall Street Journal reported. The increase is transmitting directly into higher costs across the economy because diesel fuels trucks trains barges and farm equipment that move goods to market and support construction.
Disruptions to Middle East energy shipments through the Strait of Hormuz combined with reduced Russian diesel exports after Ukrainian attacks on refineries have tightened global distillate supplies ahead of the peak harvest season a Reuters analysis distributed by US News showed. US distillate inventories stood 14 percent below the five-year average in the week ending August 28 according to Energy Information Administration figures cited by BeInCrypto and East Coast stocks reached a record seasonal low. The supply squeeze has lifted wholesale ultra-low sulfur diesel futures to multi-year highs and pushed retail prices higher in a sustained rally that began accelerating in July.
The price surge is feeding broader inflation pressures as businesses pass elevated transportation expenses on to consumers through higher grocery and goods costs the PBS NewsHour noted in its coverage of the AAA data. Brown University researchers tracking the Iran conflict estimated the cumulative fuel-cost burden on US households at $97.5 billion or roughly $744 per household since fighting started at the end of February. Trucking and logistics operators face the steepest immediate impact because diesel represents a major operating expense that has risen nearly 60 percent in the past 12 months.
Regional variations remain pronounced with Western states recording the highest averages because of greater distance from refining centers and differing tax structures BBC News reported based on AAA breakdowns. In Washington state for example the average stood at $6.81 a gallon compared with $5.03 a year earlier while the national gasoline average also climbed to $4.15 from $3.20 over the same period. These increases compound cost-of-living strains that have already affected household budgets and contributed to shifting political sentiment ahead of upcoming elections.
GasBuddy petroleum analyst Patrick De Haan confirmed the new record on September 3 when the national average first edged above the 2022 mark at $5.82 before AAA’s Friday reading pushed it to $5.85 FreightWaves noted in its review of both tracking services. The 2022 peak occurred months after the Ukraine war began and triggered sanctions that curtailed Russian exports a parallel dynamic to the current Middle East disruptions that have reduced seaborne diesel and jet-fuel volumes by hundreds of thousands of barrels per day. Adjusted for inflation however some historical peaks from the 2008 era would still exceed the current nominal level according to government data referenced in the PBS report.
Vice President JD Vance attributed the price spike to Iranian actions targeting oil tankers in the Strait of Hormuz while asserting administration policies had prevented even steeper rises Politico reported from White House remarks on September 3. The administration has pointed to deals such as an oil arrangement with Venezuela as measures intended to ease domestic fuel costs though analysts caution that global supply constraints will likely keep pressure on prices into the fall. Industry observers expect further seasonal demand from agriculture and heating to test whether additional refining capacity or inventory releases can moderate the upward trajectory in coming weeks.
