When Randy Madden saw diesel prices rising, he delayed purchasing fuel for his 3,000-acre Iowa farm. But prices remain high, and he now expects to spend over $40,000 on fuel during harvest — roughly double his typical cost. The average U.S. diesel price hit $5.62 a gallon, 53% higher than a year ago, per AAA. Disruptions after the U.S. and Israel went to war with Iran pushed diesel near record levels, threatening broader price increases.

Diesel powers much of America's economy — farms, trucks, trains, and heavy machinery. As costs climb, businesses pass them to consumers. "Diesel is the workhorse fuel used mostly by the corporate sector and small businesses," said Daan Struyven, a Goldman Sachs commodities analyst.

The global crunch stems from insufficient diesel supply. Russia's refining capacity dropped from 5.3 million barrels per day to 3.9 million in July due to drone strikes damaging refineries, forcing a suspension of exports. Debnil Chowdhury of S&P Global estimates 40% of Russian refining capacity is impacted. The closure of the Strait of Hormuz further restricted crude flows, pushing global oil prices up 20% to $86 a barrel.

U.S. refineries operate at 97% capacity, with diesel exports up 28%. Higher prices benefit refineries — Valero Energy and Marathon Petroleum reported doubled profit margins — while hurting users like farmers and truckers.