The average price of diesel in the United States rose above $5 a gallon on Thursday, up 33 percent since the start of the war with Iran as the reignited conflict continued to inflate energy prices.
The average national price on Thursday was $5.01, according to the AAA motor club, up 7 cents from the day before.
Soaring prices of diesel can reverberate across the rest of the economy because of its many uses, including industrial machinery, commercial transport and electricity generation.
U.S. diesel prices first surpassed $5 a gallon in March, the highest level since 2022 when Russia invaded Ukraine. The prices retreated below $5 in June after Iran and the United States announced they had signed a memorandum of understanding that was meant to quell the fighting in the Strait of Hormuz, a critical thoroughfare for the world’s oil.
But renewed strikes between the United States and Iran in the strait have slowed shipping nearly to a halt. On Monday, President Trump said he would reinstate a naval blockade on Iranian ports and mused about making Gulf states invest in the United States in exchange for military protection while transiting through the strait.
And while the market for oil is tight, the squeeze on the market for diesel and gasoline has been even tighter. Many refineries around the world that turn crude oil into fuel have shut or are producing at lower levels.
A number of oil and gas facilities across the Persian Gulf were damaged in attacks at the beginning of the war, which started on Feb. 28. Refineries around the world are processing roughly 4 percent less oil than they were a year ago, according to the International Energy Agency.
That decline has been particularly severe in Russia, whose refineries have suffered extensive damage from Ukrainian drone attacks. Russia is typically one of the world’s largest exporters of diesel but it banned overseas sales of the fuel in early July to preserve domestic supplies. The ban is in place until July 31. While the United States does not import fuel from Russia, the lost exports have further tightened global supplies.
China has cut down its refinery processing, too, amid weakened domestic demand and elevated prices for crude oil. It also curbed its fuel exports for the past four months to shore up its own supplies.
As a result, the gap between current prices and prewar prices is a lot higher for gasoline and diesel than it is for oil. The average national gasoline price was $3.94 on Thursday, according to AAA, up 32 percent since the beginning of the war. The price of Brent crude, the international benchmark, was close to $85 a barrel on Thursday.
The I.E.A. said in a report this month that while more crude oil was hitting the market, “refinery activity and product supplies have been much slower to respond.”
“Gulf exports of refined products and L.P.G. in June remained less than half their prewar levels, compared with crude flows that reached nearly three-quarters of their February rates,” the report said, referring to liquefied petroleum gas.
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