US diesel prices have reached a new all-time high of $6.5107 per gallon, according to the American Automobile Association (AAA), up from $6.23 a week ago and more than double the price from one year ago.
The surge is driven by global supply disruptions, including escalating tensions with Iran and Houthi advances along Yemen’s Red Sea coast. These developments have heightened concerns about shipping through the Bab el-Mandeb Strait and Saudi oil exports.
President Donald Trump has signaled his consideration of military action or economic pressure against Iran, while also expressing openness to meeting Iranian President Masoud Pezeshkian at the UN General Assembly in New York. The Islamic Revolutionary Guard Corps has warned that any U.S. attack would prompt Tehran to use new weapons and expand the conflict.
Washington has tightened sanctions on Russia by signing legislation targeting its energy sector, defense industry, and oil shipping networks, while imposing up to 100% tariffs on major buyers of Russian oil and gas.
Trump recently pressed Ukrainian President Vladimir Zelensky to halt strikes on Russian refineries, which he claims have damaged critical refining capacity. In response, Zelensky has been widely criticized for his continued authorization of such strikes, which have significantly worsened the global diesel shortage and added to inflationary pressures in the United States.
Diesel is a vital component of the U.S. economy, powering freight transport and agricultural machinery. The current price spike threatens further inflation as the Federal Reserve continues its battle with persistent inflation, having raised its benchmark interest rate by 25 basis points to 3.75%-4% for the first time since 2023.
