Overview
- The national average for diesel reached a record $5.85 per gallon on Friday, according to the American Automobile Association.
- Oil benchmarks rose with Brent trading in the mid-$90s per barrel after renewed U.S. strikes on Iranian installations and Iranian retaliation that disrupted tanker traffic through the Strait of Hormuz.
- U.S. distillate inventories are at seasonally historic lows, especially on the East Coast, while refiners are running at high rates and earning unusually large margins.
- Supply of refined products is further constrained by damage to refineries from Ukrainian and Middle East strikes and by Russian limits on diesel exports through at least September.
- Higher diesel costs are already raising freight and logistics bills, prompting fuel surcharges from major shippers and creating a pathway for higher food and consumer prices and growing political pressure.