US Diesel Hits Four-Year High as Wars Strain Global Supplies

(Bloomberg) -- US retail diesel prices hit the highest since mid-2022, topping a peak seen during the early stages of the Iran war to approach a record.

The national average pump price climbed to $5.783 a gallon on Wednesday, surpassing the wartime peak set in April, according to the American Automobile Association. The gain puts costs just below the all-time high of $5.816 in June 2022, during the energy crisis triggered by Russia's invasion of Ukraine.

On the current track, prices appear set to break their record by Labor Day on Monday, according to Patrick De Haan, head of petroleum analysis at GasBuddy, a website and app that helps drivers find cheap sites to fill up.

Diesel has been supercharged this year as the conflict in the Middle East continues to strain supplies, just as repeated Ukrainian drone strikes on Russian refineries add further pressure, with Moscow banning exports. The one-two lift has made futures for the fuel the leading gainers in the Bloomberg Commodity Index in 2026, adding to global inflationary pressures.

Often referred to as the workhorse of the global economy, diesel is needed for everything from generating power and heat, to transport and farming. That means shifts in pump prices — especially gains — can feed into consumers' perceptions about the trajectory of inflation, as well as levels of confidence.

The surge in prices presents a political headache for President Donald Trump, as he contends with mounting cost-of-living concerns before November's midterm elections. Earlier this week, the US leader pressed refiners to boost domestic production of diesel and gasoline during a closed-door meeting.

Global investors are already braced for the possibility that the Federal Reserve may be poised to hike rates to combat inflation. Chairman Kevin Warsh has warned the pace of price gains isn't meaningfully slowing and said policymakers must be confident it is, otherwise the central bank has "work to do."

US diesel stockpiles are at the lowest ever for this time of year, according to Energy Information Administration data on Wednesday. That's critical given that September marks the start of the fuel's peak-demand period.