Diesel refining margins have surged to unprecedented levels as the Iran war tightens global fuel supplies, raising concerns that elevated diesel costs could ripple through trucking, agriculture and the broader U.S. economy.
The Iran War Sent Gas Prices Skyrocketing, but the US Now Faces a Diesel Problem
MarketDash
Diesel Crack Spread recently reached a record high of $102/bbl amid U.S. refineries prioritizing exports over domestic supply.
Get Bank Of America Alerts
Weekly insights + SMS alerts
Diesel Crack Spread At $100
The Diesel Crack Spread, which indicates the profit margin that refineries make on refining diesel from Crude oil, surged to $102/bbl on Monday, before coming down to about $100/bbl on Tuesday, according to a report by Bloomberg. The crack spread had never risen above $89/bbl before this week's surge, as per the report.
Strong U.S. diesel exports are further tightening domestic supplies, according to a report by the Wall Street Journal. Diesel is a crucial part of the global economy as it has wide-ranging applications in transportation, energy and more.
Analysts from Bank of America Corp (BAC), cited by the WSJ report, said that exports were "drawing down already tight U.S. inventories," and that a "global competition for fuel" was pushing diesel cracks "back toward record seasonal highs."
Trucks used to transport goods mostly run on diesel, while diesel is also crucial for heating needs as winter months and colder temperatures get closer. Diesel is also essential to run farming equipment like tractors and more as the fall harvest season looms. Higher diesel prices could raise costs across agriculture and freight, potentially adding to food-price pressures.
Midterm Dilemma?
The Financial Times, on Tuesday, reported that soaring diesel prices could also have impacts on the upcoming midterm elections in November, citing a recent poll it conducted that showed more than 50% of American voters were disapproving of President Donald Trump and his policies, citing high costs of groceries and fuel, among others.
According to data from the American Automobile Association, the national average price of diesel on Wednesday was $5.5042/gallon, higher than Tuesday's average price of $5.4677/gallon. In California, diesel topped $7 on average, at $7.0066/gallon.
Energy Secretary Touts Higher Oil Output
As prices soar, Trump's Energy Secretary Chris Wright touted a U.S. oil production surge in Texas as a means to offset the supply crunch and the high fuel costs due to factors like the Strait of Hormuz's closure, as well as the Russia-Ukraine conflict, among others.
Wright also blamed former President Joe Biden-era clean energy laws for being as responsible for high fuel costs in the U.S. as the Iran war. Meanwhile, Trump recently rejected a ceasefire extension following the expiration of the 60-day ceasefire agreed in the Memorandum of Understanding (MoU).
However, as the President recently staked a claim over the Strait of Hormuz, Iran's Security Chief Mohsen Rezaee pushed back against the idea, saying that it was not under the U.S.'s control.
More News
3 AI stocks to buy before December 2026
Watch this before August 31st
$44 Trillion “Super Convergence:” Elon’s Biggest Move EVER?
The Tech IPO Set to Be 41X bigger than the Microsoft, Google, and Amazon IPOs combined
Elon Musk Drops Bombshell During SpaceX Earnings Call
The Free Guide Every New Options Trader Needs
Google's secret $99 billion profit
He turned $12K into $1.65M without touching Apple or Tesla
Get Bank Of America Alerts
Real-time alerts on price moves, news, and trading opportunities.
Join 20,000+ investors. No spam, ever.
Featured Articles
View all news
SK Hynix Stock Drops 7.82% in Seoul as KOSPI Suffers Brutal Rout: Brent Above $90, Trump Rules Out Iran Talks
By MarketDash
August 19, 2026
Once you see it, you can't unsee it (Ad)
By Behind The Markets
Iran's Security Chief Says 'Welcome to the Post-American Order' After Trump's Strait of Hormuz Claim
By MarketDash
August 19, 2026
Futures Edge Higher as Trump Nixes Iran Talks, Fed Minutes Loom: KEYS, MRCY, SKHY in Focus
By MarketDash
August 19, 2026
Trump's Last-Minute Canada Tariff Pause: 'We Have a Deal'
By MarketDash
August 19, 2026
Trade the "Fav-4" for weekly income (Ad)
By Base Camp Trading
Micron Stock Rebounds After Cathie Wood's Memory Warning
By MarketDash
August 19, 2026
Disney Sues Trump's FCC Over ABC Probe, Calling It an 'Extraordinary Assault on Free Speech'
By MarketDash
August 19, 2026