U.S. diesel prices hit a record $6.505 a gallon on Sunday, up about $1 in four weeks, as Middle East conflict and attacks on Russian refineries tighten global fuel supply. The surge threatens to add to inflation just as the Federal Reserve raised interest rates for the first time since 2023.
U.S. diesel prices reached a record $6.505 a gallon on Sunday, according to AAA data. That is up about $1 in just four weeks. A separate tally from Crypto Briefing put the price even higher, at $6.51 a gallon.
Middle East conflict and Russia squeeze supply
The surge reflects a deepening global fuel crunch, with supply constraints stemming from the Middle East and Russia, and Brent crude holding near $100 a barrel. That holds despite a 2.7% decline so far on Monday.
Ukrainian attacks on Russian refineries and conflict in the Middle East have squeezed refined product supplies, while limited global refining capacity has amplified the impact. Crypto Briefing adds that reduced export flows from key producers and low inventories are compounding the constrained refining capacity.
Freight and agriculture feel the pinch
Rising diesel costs matter because the fuel underpins freight, agriculture and industry, so increases tend to ripple through the wider economy. Gasoline prices have also climbed, reaching $4.48 a gallon, up from $4.10 a month earlier.
Adds to inflation pressure ahead of midterms
The jump threatens broader inflation at a sensitive time. The Federal Reserve raised interest rates last week for the first time since 2023, with Chair Kevin Warsh saying, according to Investing.com: "the plain fact is that inflation is too high, and has been for too long."
Higher pump prices also carry political risk ahead of the U.S. midterm elections.
Sources: Commodities & Futures News, Crypto Briefing
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