US diesel prices have climbed to an all-time high, with pump prices hitting an average of $5.85 a gallon for the first time ever on Friday, according to the American Automobile Association. This eclipses the previous record set after Russia’s full-scale invasion of Ukraine in 2022. Fuel costs have soared due to a continued global shortage of diesel driven by the stalemate in the Iran war and Ukrainian attacks on Russian refineries.

Amrita Sen, founder of consultancy Energy Aspects, said diesel prices must stay around $200 a barrel to trigger demand destruction, noting no other solution exists. From October, prices may rise further due to harvest season, winter heating demand, and US refinery maintenance. Higher diesel prices are expected to feed inflation, a key concern for voters ahead of November’s congressional elections.

Donald Trump held talks with oil executives at the White House to urge action against fuel price inflation linked to his Iran policy. About three-quarters of US diesel is used for transportation and trucking, and it is vital for agriculture during harvest. The Atlantic Council noted rural areas are being hit hard, citing Wyoming, North Dakota, and Alaska as having the highest per capita diesel consumption in 2024.

The US Agriculture Department projected a 2.5% real-term decline in farmers’ incomes in 2026, with fuel costs rising nearly 30% and fertiliser by 15%. Energy Aspects suggested the Trump administration could relax fuel regulations to boost diesel output and escort tankers through the Strait of Hormuz. The US could also urge Europe to release more diesel from strategic reserves, as only 10% of the 73 million barrels pledged have been drawn so far.

The diesel-crude premium exceeded $100 a barrel in Europe for the first time, called 'truly unprecedented' by Argus Media. Gasoline prices also rose to $4.15 a gallon, and Brent crude traded at $95 a barrel after a nearly 7% weekly rise.