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(Bloomberg) — US diesel rose above $5 a gallon for the first time since December 2022, the latest sign of surging fuel price pressures menacing the global economy as the war in Iran continues to disrupt energy supplies.
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The nationwide average retail price reached $5.044 a gallon on Monday, according to the American Automobile Association. It has gained sharply since the conflict began.
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The surge in prices comes as the Strait of Hormuz — through which about a fifth of the world’s oil transit each day — remains largely closed to traffic. Countries are adopting increasing levels of protectionism in order to keep fuel at home and shield consumers from the higher costs.
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The jump in US retail diesel prices is the latest surge among fuels that are key to the day-to-day functioning of the global economy. Jet fuel has soared above $200 a barrel and fuel oil — usually a product that trades lower than crude futures, but one that keeps shipping moving — is now close to $140 a barrel.
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Diesel is more important than most fuels. Across the world, it powers freight, agriculture, and construction industries. Any spike at the retail level will ripple through the broader economy. Prices have surged faster than most other petroleum-based products because Persian Gulf refineries are major suppliers.
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In some US states, diesel prices had already surpassed the $5 mark. Prices for residential heating oil, which is effectively interchangeable with diesel, have also climbed above $5, according to the US Energy Information Administration. For US President Donald Trump, a prolonged surge in fuel prices could weigh on midterm election prospects later this year.
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South Korea’s Industry Minister said on Tuesday that his country will set a cap on the volume of oil product exports by its oil refiners. Last week China’s refiners began canceling agreed export cargoes for gasoline and diesel.
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—With assistance from Alex Longley.
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(Updates with additional fuel prices throughout.)
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English (US)