The national average price for diesel fuel in the U.S. has reached a record $6.51 per gallon, according to the American Automobile Association (AAA). This marks the first time diesel prices have exceeded $6.50, extending a rally driven by supply disruptions linked to ongoing conflicts in the Middle East and Eastern Europe.
On Sept. 21, diesel prices hit the new high, with 10% of U.S. service stations charging more than $7 per gallon and the lowest 10% averaging $5.83 per gallon, as reported by GasBuddy analyst Patrick De Haan. The surge follows disruptions in key oil transit routes and refinery operations.
Geopolitical Disruptions Drive Price Surge
AAA attributed the price increase to continued volatility in the Strait of Hormuz, a critical maritime chokepoint through which roughly one-fifth of the world’s oil and liquefied natural gas previously passed. Recent data showed only 17 commodity vessels traversing the strait over a recent weekend, down from 37 the prior week. The U.S. and Iran have engaged in competing efforts to control the strait, further straining global fuel supplies.
Additionally, attacks on Russian refineries by Ukrainian drones have compounded the strain on global fuel markets. Over the weekend, Ukraine targeted the Moscow Oil Refinery, one of Russia’s largest facilities, according to city officials.
Economic Impact on Key Sectors
Diesel powers critical infrastructure, including trucking, freight, farming, and delivery networks, making the price surge a significant economic concern. Farmers, in particular, are facing severe financial strain. John Boyd Jr., a fourth-generation farmer in southwest Virginia and founder of the National Black Farmers Association, reported paying $7 per gallon for diesel—nearly double the cost from a year ago. Boyd described the situation as a “national farm crisis”, noting that higher fuel costs are forcing farmers to reallocate funds from other essential expenses.
Boyd, who grows soybeans, corn, and wheat while raising beef cattle, emphasized the immediate financial pressure. “I’m having to come up with money that’s really not in the budget,” he told NPR. With corn selling for about $5 per bushel, Boyd said the added fuel costs are exacerbating existing financial pressures, including the risk of farm foreclosures. He noted that more than 400 Black farmers are at risk of losing their farms and require financial assistance.
Policy Responses and Political Reactions
Some U.S. lawmakers have proposed measures to address the diesel price surge. Sen. Chuck Grassley (R-Iowa) urged President Donald Trump to impose an embargo on diesel exports, arguing that high diesel prices were “killing” farmers’ incomes. Grassley’s call reflects broader concerns about the economic impact of fuel costs on agricultural producers.
The price surge also coincides with broader global fuel market volatility, which intensified after recent geopolitical developments involving the U.S., Israel, and Iran. Analysts warn that further disruptions could prolong the supply crunch, keeping prices elevated in the near term.
GasBuddy’s De Haan projected that “further increases” in diesel prices are likely, based on current market conditions. The combination of geopolitical instability, refinery disruptions, and high demand continues to exert upward pressure on fuel costs across the U.S. economy.