U.S. Diesel Sets Another Record as Supply Risks Persist

The U.S. average diesel price reached $6.5107 a gallon on Monday, September 21, a record in AAA’s daily data. The Energy Information Administration’s weekly survey put the national average at $6.529 for the week ending September 21. The measures use different survey periods, but both show prices at historic highs.

The latest jump comes amid a wider fuel supply shock tied to the war with Iran and disruptions to shipping through the Strait of Hormuz. The strait is a key route for oil and fuel shipments, and the Associated Press reported that much tanker traffic had become bottlenecked there.

That leaves diesel exposed to both crude costs and tight supplies of refined fuel. U.S. diesel prices had already passed $6 a gallon earlier in September, according to the AP, as oil supply disruptions pushed up the cost of fuel.

The price increase reaches beyond drivers at the pump. Diesel powers much of the trucking fleet that carries goods across the country, so higher fuel bills can lift delivery costs and put pressure on freight companies’ margins.

Farmers are facing the surge during harvest, when tractors, combines and trucks consume large amounts of fuel. The Los Angeles Times reported that record diesel prices were adding to costs as U.S. farmers harvested corn and soybeans.

The EIA’s weekly figure rose from $6.285 in the week ending September 14 to $6.529 one week later, a 24.4-cent increase. That weekly jump shows the squeeze was continuing beyond the single-day record reported by AAA.

For fuel markets, the next clues are whether shipping through the Strait of Hormuz improves and whether crude and refined-fuel supplies loosen. Until then, costly diesel remains a direct pressure on trucking, agriculture and the prices businesses charge to move goods.