The average price of diesel at U.S. filling stations rose to $6.505 per gallon in September, according to figures from the American Automobile Association (AAA), surpassing $6.5 for the first time and exceeding the record set in 2022.
Increase accelerates during September
The pace of diesel price increases accelerated during September, pushing the cumulative rise above 87 cents per gallon, with prices climbing almost every day as energy costs continued to rise in the world's largest economy against the backdrop of the U.S.-Iranian war.
Supply disruptions weigh on fuel production
Global supplies of industrial fuel have contracted as oil shipments through the Strait of Hormuz, which carried about one-fifth of global energy supplies before the war, have come to an almost complete halt.
Despite a relative improvement, crude oil supplies from the Gulf region have not returned to pre-war levels, limiting refineries' ability to produce fuel. Russia has also banned diesel exports, and the ban could last through the end of next October following Ukrainian drone attacks on Russian refineries that reduced fuel production.
Impact on the U.S. economy
Diesel is used to power trucks, farm equipment, electricity generators, trains, ships and home-heating systems. Although most Americans do not use it in their cars, higher diesel prices have a broader impact across sectors of the U.S. economy.
Record diesel prices ahead of the U.S. congressional midterm elections in the first week of next November could weigh on the popularity of Republican candidates, including President Donald Trump, particularly in agricultural states such as Iowa and states that rely on heating oil, such as Maine.
