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Diesel prices across the United States have reached a record high of $6 per gallon, driven by a combination of ongoing conflicts, refinery damage and global supply disruptions. Since the war with Iran began in late February, the nationwide average diesel price has surged by 60%. Economists warn that the ripple effects will push inflation higher across nearly every sector of the American economy for months to come.
Diesel Prices Drive Broader Inflation Concerns
KPMG chief economist Diane Swonk described diesel as a cost that touches virtually every part of the economy. “The cost of diesel gets into just about everything,” she said. “From running a farm to the cost of food, but also everything across the economy that’s shipped.” She added that when diesel prices rise, everything gets an extra fee tacked onto it.
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Swonk predicted that high diesel costs will remain an inflationary problem for months ahead. Joseph Brusuelas, chief economist at RSM, echoed that warning. “Consumers should be prepared to pay higher inflation for anything that requires being shipped,” he told NBC News.
Since late July, diesel prices have climbed faster than regular unleaded gasoline. Key refineries that produce diesel have gone offline or suffered destruction, both in Eastern Europe — where the Ukraine-Russia war continues — and in the Middle East. Meanwhile, the blockade of the Strait of Hormuz has disrupted all fossil fuel supplies globally. However, diesel faces additional pressure because Russian refineries play a central role in the global supply chain.
Russia normally exports more diesel than any country except the United States. However, Ukrainian drone strikes damaged Russian refineries, and the Kremlin responded by imposing a sweeping diesel export ban in July. That ban will remain in place at least through the end of September.
Farmers and Food Supply Under Pressure
Groceries are among the sectors most vulnerable to rising diesel costs. Brusuelas noted that many supermarkets already operate on razor-thin margins due to high beef prices. Beyond store shelves, however, the impact runs deeper throughout the entire food supply chain.
Farmers are feeling the strain most directly. Mark Mueller, a fourth-generation Iowa farmer, said the $6-per-gallon diesel price threatens to eliminate his profits entirely. “It’ll push me right to the edge,” he said. “If I don’t get pushed over the edge by diesel fuel prices, higher fertilizer prices will push me over the edge because a lot of petroleum goes into fertilizer prices, as well.”
Mueller, who chairs the Iowa Corn Growers Association, said the combination of high diesel and a fertilizer shortage is putting enormous pressure on U.S. farmers. As long as the Iran war keeps driving up prices for necessities like diesel and fertilizer, he warned, “we are endangering one of the strongest economic pillars that we have in this country.” “We’re shooting ourselves in the foot, and we don’t have to,” he added.
No Relief Expected Soon
Mueller is far from alone in his frustration. A new NBC News poll found that around 70% of voters disapprove of President Donald Trump’s handling of the Iran war. Republicans gathered in Dallas this week for what Trump called a midterm election convention, as the economic discontent continued to grow.
“I just see economic carnage the longer this war goes on,” Mueller said. For more than six months, Trump insisted the Iran war would be short. However, this week he conceded that high gas prices are unlikely to fall anytime soon.
“I think it’s going to take a little bit longer than the midterms” for gas costs to drop, Trump told reporters traveling with him to Dallas. He added: “Right after the election, oil prices are going to be tumbling downward.”
Meanwhile, U.S. crude oil prices have risen by more than 25% over the past month alone. Diesel, however, has been on an upward trajectory since 2022, when Russia first invaded Ukraine. In June of that year, the average U.S. diesel price set a record at $5.82 per gallon. Although prices dipped somewhat in the years that followed, they never returned to pre-2022 levels.
Diesel prices surged again this spring after the U.S. and Israel’s war with Iran closed the Strait of Hormuz and disrupted energy supplies worldwide. The latest record-breaking jump, therefore, traces back once again to the Russia-Ukraine conflict — more than four years after that war first sent diesel prices climbing.
