Crude Oil

Diesel Prices Are Breaking Records Across Multiple States, And Relief May Not Come in 2026

Wed, 06 May 2026 12:53:37 GMT

On Tuesday, President Trump stated that high gasoline prices are a “very small price to pay” for the ongoing war with Iran, arguing they are necessary to prevent Iran from obtaining a nuclear weapon. He predicted prices will “come crashing down” once the war ends. But for farmers and ranchers, diesel prices have risen more than gas, putting a further strain on already high input costs for 2026.

Trump on Oil Prices:

I looked today, it's like at 102 and that's a very small price to pay pic.twitter.com/2V8LC93wFj
— Acyn (@Acyn) May 5, 2026

To start the week, diesel prices went on another run with the national average diesel price is just 20 cents away from reaching a new all-time high. And across the country, a growing number of states aren’t waiting to get there. About six states are already seeing the national average price of diesel reach record highs.

From the Great Lakes to the West Coast, roughly a half dozen states have already smashed previous records, as a late-April dip in prices quickly faded and a fresh surge took hold.

“Diesel now averaging about $5.65 a gallon nationally. That is only about 20 cents away from a new all-time record high,” says Patrick De Haan, head of petroleum analysis at GasBuddy . “So even though we had that short-lived break, we’re right back knocking on the door of records again.”

That “break” didn’t last long. De Haan says even though diesel prices saw a bit of a respite for April, with even prices starting to trend down in mid-April, those prices re-accelerated in the last week.

New records for diesel in:
Michigan, $6.01
Illinois, $6.01
Wisconsin $5.67
(Indiana 0.2c/gal away), $6.03
(Ohio ~19c/gal away), $5.93 https://t.co/DV0387vvMR
— Patrick De Haan (@GasBuddyGuy) May 5, 2026

Now, the rally is showing up in state-by-state records, especially in the Midwest.

“Looking at it state by state, Great Lakes states have seen some tremendous refining issues that have really caused prices to rise dramatically,” he says. “Michigan has now set a new all-time record high for diesel over $6. Indiana is just a few tenths of a penny away from setting a new all-time record. Illinois has set a new all-time record. Wisconsin has set a new all-time record.”

And it’s not just a regional story. States in the West were some of the first to not just see the highest prices, but now also hit record levels.

“Out on the West Coast, Arizona set a record a couple of weeks ago, and Washington state is at an all-time record,” he adds. “So there are probably about a half dozen or so states that have set new all-time records, and again, the national average itself is just 20 cents away.”

Perhaps the most telling shift, though, is there’s no longer a low-price refuge.

“No states any longer have diesel averaging below $5 a gallon,” De Haan says. “Texas was the last holdout, and it now is above $5 per gallon. So across the board, $5 diesel is now essentially the floor, and in some areas, that’s actually the cheaper end of the spectrum.”

At the high end, prices are reaching extremes with California’s average diesel price now surpassing $8 per gallon.

Global Tensions Cloud Relief Outlook

With prices continuing to climb, farmers are looking for relief. What would it take to reverse course? That answer remains tied to global uncertainty.

“Relief may be a little bit elusive,” De Haan admits. “It really just depends on the daily developments in the situation between the U.S. and Iran—whether the Strait is open or not, or whether we’re in phases of escalation.”

The Strait of Hormuz remains a critical chokepoint for global energy supply, moving roughly 20 million barrels of oil per day.

“Nothing else matters to the oil market more than this waterway,” he emphasizes. “We’ve seen attacks that have pushed oil prices higher, which in turn pushes diesel wholesale prices up. You may get a little bit of day-to-day relief, but there really is no ‘coast is clear’ until there’s some sort of definitive resolution.”

And even then, he says a turnaround won’t happen overnight.

“If there is a definitive signal to the market, if the Strait reopens and both sides are aligned, prices could start falling within 48 hours,” De Haan explained. “But the rate of decline is likely to slow after that initial drop.”

Prices Likely to Remain Elevated Through 2026

Not only is the rate of decline projected to be slow, but De Haan says diesel prices aren’t likely to drop back to pre-war levels by the end of the year.

“Roughly half of the increase we’ve seen over the last couple of months could come down within the first few months of positive news,” he said. “But the other half could take many more months. We may not get back to pre-conflict diesel prices until late this year—or even into 2027.”

For agriculture, that prolonged stretch of elevated prices carries real consequences.

“When you look at what comes out of a barrel of oil, diesel only makes up about 25%,” De Haan explained. “Gasoline is a larger portion, so it’s been less impacted. Jet fuel, which is an even smaller share, has been hit the hardest. So it’s almost inverse to how much is produced.”

Why Diesel Is Climbing Faster Than Gasoline

If it feels like diesel prices are rising faster and hitting harder than gasoline, there’s a reason rooted in how a barrel of oil gets used.

“Diesel has seen more of the sticker shock compared to gasoline,” says De Haan. “And a lot of that comes down to what comes out of a barrel of oil.”

Not all fuels are created equally in supply. Gasoline makes up the largest share of a refined barrel, while diesel represents a smaller slice, making it more vulnerable when supply is disrupted.

“Gasoline is the top product flowing out of a barrel of oil, so it’s been the least impacted,” De Haan explains. “Diesel, on the other hand, only accounts for about 25% of a barrel, so it’s been more impacted when there are supply issues.”

That imbalance becomes even clearer when looking across the full spectrum of refined fuels.

“The most significant impact has actually been to jet fuel, which is only about 9% of a barrel,” he adds. “So if you look at it inversely—the smaller the share of the barrel, the bigger the impact we’re seeing right now.”

For agriculture, that dynamic matters more than most sectors.

Diesel isn’t optional on the farm. It’s essential. From planting to harvest, it powers tractors, trucks and the supply chain that moves commodities across the country.

“Diesel is the fuel that drives agriculture,” De Haan say. “And that’s why these price increases are so impactful, not just at the pump, but all the way through the economy.”

And while prices are already elevated, the full effect is still working its way downstream.

“Consumers really haven’t even seen the full onset of some of these higher prices yet,” he adds. “That’s going to continue to trickle through in the weeks ahead.”

Demand Holding...for Now

Even with these high prices, so far, demand hasn’t shown many signs of slowing.

“We have not seen much meaningful decrease in demand yet,” De Haan says. “We’ve seen very little, if any, diesel demand destruction so far, which tells you the economy is essentially preparing to pay these prices because it still needs the fuel.”

But there are warning signs ahead.

“If diesel nationally hits $6 a gallon, that’s likely when we start to see consumption slow,” he says. “For gasoline, that number is about $5 a gallon. We’re getting very close to those thresholds.”

Until then, the pressure continues to mount. And for farmers heading deeper into the growing season, that pressure is becoming harder to ignore.

Crude Awakening: Rising Oil Prices Complicate Fed's Rate-Hike Decisions

Wed, 20 Sep 2023 21:16:16 GMT

As brent crude futures soar toward $100, it’s creating a new battle in the Federal Reserve’s effort to fight inflation. One money manager warns another rate hike is likely.

Brent crude futures, the international energy benchmark, are on track to rise by 26% this quarter having climbed to about $95 a barrel. On Tuesday, they added 0.4%, putting prices on track for a four-day streak of gains and rises in 13 of the past 16 trading days. West Texas Intermediate futures, the U.S. benchmark, have jumped 29% this quarter to just over $91 a barrel.

Gasoline prices are already on the rise to a national average of $3.88 a gallon in the U.S. from $3.68 one year ago, AAA said. Gas costs jumped 11% from July to August, driving more than half of overall inflation for the month.

Meanwhile, the price of diesel, which often fuels trucks and factories, has soared even faster, especially in Europe. In the U.S., the average price is $4.58. Data from Britain this morning showed inflation fell faster than expected last month, but rising fuel prices were an outlier to that trend.

U.S. oil stockpiles fell by 5.25 million barrels last week, the API is said to have reported. That would bring holdings to the lowest in more than nine months if confirmed by the EIA today. Meanwhile, Goldman Sachs today raised its price target for Brent crude to $100, joining a growing club that predicts triple-digit oil heading into the winter.

As energy costs are on the rise, Pimco money manager Geraldine Sundstrom, says markets are underestimating the risk of another rate hike before year-end. “Higher for longer” is likely the mantra for US rates as “inflation will remain a little bit stickier than expected,” Sundstrom said.

Another important note for agriculture is the U.S. dollar is staging a comeback, surging in value despite earlier predictions of a decline, while economic growth in China and Europe faces challenges. This reversal in the dollar’s fortunes began in July, defying expectations of a retreat that were based on the belief that the Federal Reserve’s interest rate hikes were approaching their conclusion.

The dollar’s resurgence is now reminiscent of its strong performance in 2022, a year marked by economic disruptions as it drove up commodity prices in global markets and increased the burden of foreign debts for many. Mark Nash of Jupiter Asset Management characterized the dollar’s current strength as formidable, noting that he had abandoned his pessimistic stance on the dollar earlier in the year.

Freight Costs To Remain High Through Winter, Analyst Says

Fri, 28 Oct 2022 20:58:48 GMT

Freight costs are likely to remain elevated through the winter, despite the recent decline in crude oil prices, says Altin Kalo, senior economist at Steiner Consulting Group.

The U.S. Energy Administration’s recent update put inventories of diesel and heating oil at just 106 million barrels, well below the five-year range and also at the low end of the range for the last 40 years.

“Tight inventories continue to underpin diesel and heating oil prices,” Kalo said. “The average heating oil price for the week was pegged at $5.704/gallon, up 68% compared to a year ago.”

The severity of the winter weather this year will determine the trajectory of fuel oil prices. While diesel prices seemed to ease a bit towards the end of the summer, Kalo noted they have started to climb again. For the most current week the average price of diesel fuel in the US was $5.341 per gallon, up 9.2% in the last four weeks and 44% higher than last year. For diesel, the Gulf coast was the low point at $4.987 per gallon, while California was the high price at $6.331 per gallon.

“There is a wide range of diesel prices around the country, reflecting regional supply availability and tax structure,” Kalo said. “Normally the price of diesel will track with crude oil prices since it is the biggest contributor to its production cost. Last year crude oil accounted for about 49% of the overall cost of diesel fuel. Distribution and marketing was 20.2%, federal and state taxes made up 17.4% and refining costs accounted for 13.5%.”

But the spread of diesel vs. crude has widened significantly this year as the market has been unable to bolster supply quickly enough to match up with demand.

“Inventory depletion means that higher prices are needed in order to limit the quantity demand even though crude prices may be down,” Kalo said.

In its October outlook EIA noted that diesel prices for 2022 will be up about $1.7 per gallon vs. the previous year and only $0.7 of the increase is due to higher crude oil prices. The rest has gone to a larger wholesale and retail margin.

“Diesel fuel affects the entire food supply chain, from the tractors and pickup trucks on the farm to the trucks that deliver grains and livestock to plants and the vehicles that move meat products and finished goods to processing plants and retail stores,” Kalo said. “Diesel fuel is a key component for freight costs but it is not the only one. Labor, equipment and overhead are an important consideration, too. According to an index of freight trucking from the US Bureau of Labor Statistics, freight costs have been rising at a slower rate. But keep in mind that they are still rising. In September the freight PPI was up 20% compared to the previous year. Earlier in the year costs were up as much as 37.5% y/y. But cost is still up and it is now 49% compared to January 1, 2020 before the start of the pandemic.”

Higher labor and other costs are already baked in, Kalo noted, and those costs will continue to flow through into the various products traded and ultimately paid for by the US consumer.

Russian Oil Ban on the Horizon, No Near-Term US/UK Trade Deal

Tue, 20 Sep 2022 19:02:27 GMT

A U.S./U.K. trade deal is unlikely in the short to medium term, British Prime Minister Liz Truss said as she arrived in New York.

Truss said her focus was to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, along with trade deals with India and the six countries of the Gulf Cooperation Council. “Those are my trade priorities,” Truss said.

“There aren’t currently any negotiations taking place with the U.S. and I don’t have an expectation that those are going to start in the short to medium term,” Truss told reporters en route to the U.N. General Assembly.

When asked when she thought a trade deal with the U.S. might be feasible, Truss declined to comment.

President Joe Biden echoed Truss, saying such a deal was not a priority.

What This Means for U.S. Reserves

The politicians comments come as the U.S. Dept. of Energy plans to offer an additional 10 million barrels of strategic reserve oil for sale ahead of the EU’s plans to ban most Russian crude.

In March, the Biden administration authorized the release of 1 million barrels per day from the SPR over a period of six months in a bid to lower oil prices and potentially boost domestic production through contracts with companies to purchase future oil at fixed prices.

Volumes in the Strategic Petroleum Reserve have subsequently dropped to just 434 million barrels, marking their lowest level since 1984. At the start of the year, the SPR contained 593 million barrels, and it reached its highest point in 2010, when emergency stocks reached 727 million barrels.

Phil Flynn, energy market analyst at the Price Futures Group. says “the market should be freaking out” about the end of SPR draws. He thinks, when the releases end, it’s going to have the impact of losing a major producer — it will really tighten supplies. He even believes it could add another $5 to $10 premium to WTI oil prices.

The 10-million-barrel sale will bring U.S. total sales to 165 million barrels out of the 180-million-barrel target to be sold by the end of next month.

Ban on Russian Crude Oil

The reserve sale hits at a time when Global benchmark oil prices have retreated to levels seen before Russia’s invasion of Ukraine, and coincides with the Organization of Petroleum Exporting Countries (OPEC) discussing the possibility of curbing production.

OPEC and its allies agreed to cut output next month by 100,000 barrels a day. The new sale of 10 million barrels will be of sweet crude and contracts will be awarded by October 7.

Ban preparations in the EU and other countries have already begun, triggering shortages in areas outside of oil.

Oil Ban Preparations and Adverse Effects

Europe’s biggest truck makers are stockpiling natural gas and preparing to shift to alternative fuels amid the threat of a winter shortage as Russia continues to cut off pipelines to the continent.

Europe’s scramble for oil and gas is causing a tanker shortage. The liquefied natural gas (LNG) carrier shortage is particularly acute as much of the fleet has already been booked for winter when demand is expected to climb, especially when Freeport LNG restarts.

Meanwhile, Germany released another 2.5 billion euros of credit lines to secure gas supplies.

Josh Brazil, vice president of supply chain insights at Project44, is stationed in Germany. He says Russian oil bans, coupled with ongoing supply chain issues, will likely cause another wave of global disruption.

“In Germany, it’s a little bit different because we have gas rationing coming up. The worry is more about production and keeping just factories going here that are here,” he says. “Everything from just keeping factories warm to in-home heating, you name it, it’s going to go right to the core of German industry of what lights are kept on and who’s showing up to work.”

More on supply chain struggles:

Shipping Container Rates Down 63%, But We’re a Long Way From Back to Normal Operations
Nitrogen Prices Now Seeing a Resurgence For Fall, and Natural Gas Isn’t the Only Driver
Rail Strike Averted: Tentative Agreement Reached Between Railroads and Unions Comes on the Eve of Harvest

BREAKING: U.S. To Ban Russian Oil Imports

Tue, 08 Mar 2022 21:47:15 GMT

UPDATE: WASHINGTON (AP) - Biden: US ban on Russian oil a ‘powerful blow’ to ‘Putin’s war,’ warns Americans ‘defending freedom is going to cost.’

UPDATE: NEW YORK (AP) - Average price for a gallon of gasoline in the US hits a record $4.17 as the country prepares to ban Russian oil imports.

UPDATE: President Bident to speak at 10:30am EST approx. The White House says he will “announce actions to continue to hold Russia accountable”. You can watch it here .

WASHINGTON (AP) - President Joe Biden has decided to ban Russian oil imports, toughening the toll on Russia’s economy in retaliation for its invasion of Ukraine, according to a person familiar with the matter. The move follows pleas by Ukrainian President Volodmyr Zelenskyy to U.S. and Western officials to cut off the imports. Energy exports have kept a steady influx of cash flowing to Russia despite otherwise severe restrictions on its financial sector. Biden was set to announce the move as soon as Tuesday, the person said, speaking on the condition of anonymity to discuss the matter before an announcement.

NBC News reports the ban could happen as soon as Tuesday. It’s believed the move will push energy prices even higher. The President is scheduled to deliver remarks this morning from the White House about the situation involving Russia. Oil was already starting the day up over $125 a barrel on Tuesday. Follow the markets here .

This is a developing story. Stay with us for updates.

Farmers Worldwide Struggle with Rising Fuel Costs

Fri, 20 Nov 2020 05:12:18 GMT

Farmers worldwide are feeling the pinch as fuel costs rise to near four-year highs just as they plant and harvest their fields, eroding agricultural income already hamstrung by depressed crop prices.

The agricultural sector from the United States to Russia, and Brazil to Europe, is seeing profits harmed by the rise in diesel prices. The global oil benchmark, Brent crude LCOc1, touched $80 a barrel for the first time since late 2014 on Thursday.

Coupled with local economic issues, the increase is making it even harder for many farmers worldwide to turn a profit in the estimated $2.4 trillion agriculture industry, casting a cloud over future investments.

In the United States, fuel accounts for about five percent of farmers’ overall costs, and is hurting margins at a time when farm income is already half that of 2013. Massive harvests have depressed prices of staples such as corn, wheat and soybeans.

Diesel fuel is essential for planting, harvesting, and shipping crops to market. In the United States, farmers will spend an estimated $15.25 billion on fuel and oil in 2018, an 8 percent increase from 2017, U.S. Department of Agriculture data showed.

The price of ultra-low sulfur diesel used for farming equipment and transporting crops has not been this high in May since 2014. Heating oil futures, the proxy for ultra-low sulfur diesel, traded at $2.29 a gallon on Thursday.

Ron Heck, who grows soybeans in Perry, Iowa, said his fuel costs could go up $1,000 to $2,000 during the northern hemisphere’s spring.

“You feel the pain right away,” Heck said.

In Russia, fuel prices for farmers are up 50 percent compared with a year ago, Arkady Zlochevsky, the head of Russia’s Grain Union, a non-governmental farm lobby, told Reuters. Farmers will need to spend more ahead of harvesting, which starts in about a month in Russia, he said.

For a graphic on farmers’ cash expenses, click tmsnrt.rs/2rXHHQf

Financial Stress

U.S. farms are also factoring in potential losses of income due to a 25 percent tax China announced on major American imports following the U.S. government’s decision to slap duties on steel and aluminum.

“We’re seeing financial stress occurring in agriculture that we probably haven’t seen for a decade or so,” said Scott Brown, director of strategic partnerships at the University of Missouri’s College of Agriculture, Food and Natural Resources. “If diesel prices continue to go higher, it continues to put more pressure on [farmers].”

Net farm income is forecast to fall to $59.5 billion in 2018, an 8.3 percent decline from 2017, according to the USDA. It has fallen by 55 percent since 2013.

In Holly Grove, Arkansas, Tim Gannon paid about $17,000 in February to fill a 7,500-gallon tank with diesel used to run equipment and irrigation. The price increase means it may cost up to 25 percent more, or an extra $4,000, to refill it in coming weeks, he said.

“That’s a fairly significant amount of income to lose,” he said. Gannon has been taking steps to cut his diesel costs over the past year by reducing the number of times he plows, or tills.

In Brazil, farmers are also taking steps to deal with higher costs, as diesel prices have climbed 43 percent in the country since July 2017. Eder Ferreira Bueno, a farmer in grain state Mato Grosso, said increased fuel costs meant he had “no other option but to spend less to treat the soil.” Other farmers might hire fewer workers or delay investment plans, he added.

In neighboring Argentina, the top shipper of soybean meal and oil worldwide, farmers are having to deal with a weakening currency at the same time fuel costs are rising.

“Where the impact is felt greatest is in trucking costs. We are already at a disadvantage when compared to our competitors on freight costs within Argentina,” said David Hughes, a farmer in Buenos Aires province and president of Argentine wheat industry chamber Argentrigo.

In Europe, French grain producers say rising oil costs may have a knock-on effect on fertilizers and crop protection products.

“It comes at a time when things are already difficult for farmers economically,” said Philippe Pinta, head of grain growers group AGPB in Paris.

Wamego, Kansas, farmer Glenn Brunkow said he may lock in diesel prices in advance for the first time ever next year, to avoid the pain of future increases.

“You just kind of all of a sudden realize, ‘Wow, it’s pretty high,’” he said.