US Diesel Hits Highest Since April as Wars Strain Global Supply

(Bloomberg) -- US diesel advanced to the highest price since hitting a peak in April during the initial phase of the US-Iran war, highlighting the inflationary pressures menacing the global economy as the conflict drags on.

The nationwide average retail price reached $5.688 a gallon on Tuesday, according to the American Automobile Association. That's just a fraction below the April high, which was the costliest since mid-2022.

Diesel is the lifeblood of the global economy, powering trucks, agriculture and construction, and spikes at the retail level affect industries as well as consumers. The fuel has been boosted this year by the conflict in the Middle East, as well as the Russia-Ukraine war. Moscow — typically a major supplier — has curbed exports following waves of attacks on its refineries.

Earlier this week, President Donald Trump pressed US oil refiners to boost domestic production of diesel and gasoline during a closed-door meeting, as he contends with mounting cost-of-living concerns before November's midterm elections. Trump made clear he wants lower prices at the pump for Americans, and asked executives how to increase capacity, according to a White House official who provided details on condition of anonymity.

Goldman Sachs Group Inc. has been among the banks warning of tightness in the diesel market, highlighting strikes on refineries in the Middle East and Russia that have hit already-stretched global capacity. As energy prices advance, "diesel remains at the epicenter of the rally," the bank's analysts said in an Aug. 28 note.