US diesel prices cross $6 per gallon, setting new record

US diesel prices crossed the $6 per gallon mark on Friday for the first time on record, setting a new all-time high as global conflict has roiled the energy complex and sent prices of oil products soaring .

The diesel price paid at the pump was $6.05 per gallon on Friday, per AAA, a startlingly fast climb up from $5.32 one month ago and $3.70 a year ago. Prices on the leading crude benchmarks, international Brent ( BZ=F ) and US WTI ( CL=F ), both remained up roughly 20% over the past month, even after pulling back by several percentage points overnight.

Diesel prices, especially, are closely watched due to the fuel's role as the "workhorse" of the global economy, powering everything from US 18-wheeler trucks to home heaters in the US Northeast, hospital generators, and construction equipment.

Prices on the entire energy complex have soared since the US and Israel began striking Iran in late February, kicking off the largest and longest-lasting war in the Middle East since the Gulf wars of the early 2000s. As Tehran's military forces moved to cut off oil flows through the Strait of Hormuz, the world's most critical chokepoint for energy supplies, crude oil prices soared, pushing toward $120 per barrel.

Yet the surge in pricing on refined products made from crude oil — such as diesel, gasoline, and jet fuel — has moved up faster and more firmly.

Even as exports of crude from the Persian Gulf have recovered to roughly two-thirds of their pre-war levels, per Goldman Sachs, refining capacity around the world remains severely limited, and supplies remain at years-long lows.

Strikes by Iran and Yemen-based Houthi militants have affected refining infrastructure throughout the Gulf region. To the north, Ukraine's drone strikes have proven highly effective at damaging refineries inside Russia, which supplied roughly 10% of global diesel exports prior to Moscow's 2022 invasion of Ukraine. Vladimir Putin's government implemented an export ban on diesel to safeguard domestic demand in July and extended that ban through the end of September.

Major US and international refiners disclosed in recent earnings reports that they are running their refineries at near-100% capacity. Such fullness in refinery runs has put the energy market in a situation where, even if more crude oil is brought to market, there aren't refiners available to turn that crude into the products that are actually used to power the global economy.