Diesel Prices Hit All-time High As Trump Administration Brandishes Energy Policies

U.S. diesel fuel prices hit a record high Thursday afternoon, according to a fuel price monitoring service, surpassing the previous peak set in 2022 as surging crude oil and refining bottlenecks sent the cost of the fuel that underpins a wide swathe of the U.S. economy soaring.

Diesel prices have risen nearly 60 percent in the past 12 months as the U.S. war against Iran has scrambled oil shipments from the Middle East and Russia’s output of the fuel has dwindled because of its war against Ukraine. The new record is likely to spread through the economy and feed inflation that could damage Republican prospects of keeping control of Congress in November’s midterm elections.

Diesel now costs an average of $5.82 a gallon, according to the pricing service GasBuddy, breaking the previous record high of $5.81 set under former President Joe Biden in June 2022 when fuel costs skyrocketed amid Russia’s invasion of Ukraine and the post-Covid global economy.

Vice President JD Vance told reporters at the White House on Thursday that gas prices are high because the Iranian regime is targeting oil tankers moving through the Strait of Hormuz. He also claimed that gas prices “could have been much much higher were it not for our efforts” and downplayed the notion that the world is currently experiencing an energy crisis.

“I can't repeat this enough, but for the leadership of President Trump and the hard work of our troops, we would have had an energy crisis because the Iranians refused to stop acting like terrorists in the Strait of Hormuz,” Vance said.

The White House said that Trump, who promised to cut energy prices in half, is taking steps that will soon bring prices down.

“This week the President met with nearly a dozen refiners to discuss ways to expand our refining capacity, which will lower prices at the pump,” White House spokesperson Taylor Rogers said. “As the U.S. military fully degrades the terrorist Iranian regime’s ability to attack shipping vessels, oil and gas prices will fall back to pre-conflict levels.”

For now, there’s no sign that diesel prices will fall anytime soon, experts said.

The effects of the price at the pump with the green handle go far further than the filling station. Freight and farms run on diesel, so high diesel prices seep into the price of food and anything else delivered by a big rig.

"Diesel sort of runs the U.S. economy," said Dean Croke, principal analyst at DAT Freight & Analytics, "and I think that's the bigger problem."

Cost of living concerns are expected to decide which party controls the Senate and House. And diesel is considering the backbone of the economy, driving up the cost of groceries, manufactured goods, inflation and more.

That’s where voters are “feeling a crunch” right now, said Doug Heye, former spokesperson for the Republican National Committee and a longtime GOP strategist.

“Any time they have to spend on anything, they're upset with what it costs,” he said. “A threshold like this is just another sign of how expensive it's become just to get by.”

The spike in diesel prices also comes as drivers face record-setting gasoline prices heading into Labor Day weekend, which are some of the country’s biggest travel days of the year.

The cost of a regular gallon of gasoline is at a record high $4.14 for this time of year, according to AAA. That's well above the previous Labor Day record of $3.82, set on Sept. 3, 2012.

And the national average price in August was above $4 per gallon every day of the month, making it the most expensive August ever for gasoline.

A POLITICO Poll conducted in August found that 61 percent of individuals surveyed believe the Iran war has made things more expensive for their families, up 4 percent from a month earlier.

But oil and the Strait of Hormuz are not the only problem. Persian Gulf refineries have been hit in the exchanges of missile fire. And Ukrainian drone attacks have taken refineries offline in Russia.

Russia, which last year accounted for more than 10 percent of the world's diesel exports, is now importing diesel and gasoline, and has largely banned exports.

In the United States, refineries are setting records for output. U.S. refineries operated at 98 percent of their operable capacity last week. Some have delayed maintenance, increasing the chances of outages that could drive up prices further.

A bigger disruption, with a bigger effect on price, could occur if a large hurricane threatens the U.S. Gulf Coast, where the bulk of U.S. refining capacity is located.