US diesel prices rise above $6 per gallon for the first time

The average retail price of diesel in the US has exceeded $6 per gallon for the first time amid escalating tensions around Iran and tighter global fuel supplies. Since late February, diesel prices in the country have risen by nearly 60%.

Additional pressure on the market has come from Russia’s ban on diesel exports following shutdowns at several refineries. Restrictions on fuel exports from China have also reduced available supply on the global market.

Against this backdrop, crude oil futures climbed to their highest level since mid-May. Higher diesel prices are already increasing costs for sectors that depend on freight transportation, machinery and deliveries. For the agricultural sector, elevated fuel prices could also raise the cost of planting campaigns and fieldwork.

US diesel inventories stand at around 106.3 mln barrels, 13% below the five-year average. At the same time, the diesel crack spread, which reflects refining margins, rose to a record $112.17 per barrel.

Further price movements will depend on developments in the Middle East, oil product exports from Russia and China, and the pace of inventory recovery in the US. Persistently high diesel prices could continue to put pressure on transportation and production costs.

Tags: prices, USA, diesel fuel