President Donald Trump’s decision to restart his illegal war with Iran has sent the price of oil back up, leading to a corresponding rise in the prices of gasoline and diesel fuel.
Data published by AAA on Thursday showed that the average price of diesel in the US is once again over $5 per gallon, which is 33% higher than the average price of diesel before Trump unlawfully attacked Iran without congressional authorization in February.
Oil industry analyst Patrick De Haan wrote in a Thursday social media post that diesel fuel powers “the trucks that move nearly everything you buy—groceries, goods, supplies,” meaning the current spike will lead to “higher prices down the line” for other key goods.
According to a Thursday report in The Wall Street Journal, the rise in diesel prices is unlikely to be short-lived given that there are now multiple factors pushing costs higher.
In addition to the resumption of the Iran war, the Journal writes, Russia has now banned diesel exports after its refineries came under attack by Ukraine. And in the US, domestic stockpiles of the fuel have now fallen to their lowest levels in 20 years.
Given all these factors, analysts told the Journal that diesel prices “could soon climb an additional 20 to 25 cents a gallon.”
An analysis published on Thursday by CNN Business senior reporter David Goldman pointed to another factor pushing diesel prices higher: Global refining capacities have taken a significant hit since the start of the Iran war.
Goldman noted that Iran has “damaged or destroyed 30 Middle Eastern refineries” since the start of the conflict, causing global refinery output to fall by “3 million barrels at the peak of the Strait of Hormuz disruption, and 2.1 million barrels of refining capacity remain offline.”
Energy analyst John Kemp said on Thursday that the diesel supply crunch will likely spill over to the price of regular gasoline in the coming weeks.
“US gasoline inventories have become critically low,” Kemp explained in a social media post, “as domestic refiners prioritize production of jet fuel and diesel to replace global supplies hit by the closure of the Strait of Hormuz and Ukraine’s escalating attacks on Russia’s refineries.”
Kemp added that the US gasoline stocks “have depleted in 13 of the last 16 weeks by a total of 43 million barrels” since the start of the war, making it “by far the largest [depletion] on record for the time of year, and three times faster than average over the last decade.”
In an interview with Bloomberg published on Wednesday, International Energy Agency Executive Director Fatih Birol warned that renewed fighting between the US and Iran was again threatening to create a global fuel supply crisis that could come in “not months” but “weeks.”
“If the Strait of Hormuz remains closed,” Birol said, “we may again have some difficulty for global economies, including those in the region and developing nations and Asia.”
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