Diesel Prices Hit Highest Level Since Iran War Began

The average price of diesel gas hit its highest level since the Iran war began, according to AAA data released Wednesday, as a global supply bottleneck tightens ahead of rising seasonal demand.

Diesel, which powers boats, trains, farm equipment and 18-wheelers, reached $5.69 a gallon nationwide — up 33 cents from a month ago and 54% from September 2025, when the average was $3.69 a gallon. That pace far outstrips unleaded gasoline, which is up about 29% over the same period.

"There are more alarms going off for diesel than for other crude oil products," said Gregory Brew, an analyst with the Eurasia Group consultancy.

After a summer surge tied to airstrikes on Middle East refineries, Brew said Ukrainian drone strikes on Russian oil refineries are now having an equal or greater effect on diesel prices. Russia is the world's second-largest diesel exporter after the United States, and knocking its refineries offline has sharply cut Eastern European exports.

Meanwhile, U.S. diesel stockpiles fell in late August to seasonal levels not seen since the 1980s, according to the Energy Information Administration. With demand steady, refiners in the U.S. and Canada have been able to charge a premium, pushing profit margins for major diesel refiners to record highs.

U.S. refiners have boosted diesel and related fuel exports by about 28% over the past year. Shares of major refiners Valero and Marathon have both climbed more than 45% since mid-June.

The issue has drawn attention from the White House, which is seeking ways to lower consumer prices. President Donald Trump summoned about a dozen major U.S. oil refiners to Washington on Tuesday to discuss expanding capacity. "This was not a 'drill, baby, drill' meeting. This was a 'refine, baby, refine' meeting," said White House Deputy Press Secretary Taylor Rogers.

Rising diesel costs could ripple into grocery prices, since retailers facing higher wholesale costs may pass them to consumers. J.P. Morgan analysts have warned global food inflation could hit 5% in the first half of 2027 — nearly double this year's rate — with October, when heating, harvest demand and holiday shipping overlap, expected to be a critical month for diesel demand.