U.S. diesel prices hit record as global supply tightens

The U.S. national average diesel price reached a record US$5.850 a gallon on 4 September, according to the American Automobile Association, as reported disruptions to Middle East energy flows and Russian refineries tightened global supplies.

The price was up from US$3.712 a gallon a year earlier. Russia has restricted diesel exports and reduced domestic fuel production following sustained Ukrainian attacks on its refineries, while the report said the war had curtailed flows through the Strait of Hormuz, a major route for Gulf oil and refined products.

The disruption is prompting more buyers to source diesel from the United States, encouraging domestic producers to maximise output and exports. U.S. diesel refining margins, known as the diesel crack spread, reportedly exceeded US$100 a barrel in August for the first time.

Diesel is used extensively in freight, construction equipment, shipping and heating. A prolonged supply crunch could increase pressure on transport, food, construction and household-fuel costs, although the report did not quantify those effects.

Seasonal demand may add further pressure, with farmers using diesel during the Northern Hemisphere harvest and heating demand typically rising later in the year. Planned autumn refinery maintenance could also remove processing capacity as demand increases.