US diesel prices cross $6 per gallon for first time, surge 61% in a year amid Middle East conflict
&imwidth=600&imheight=450&format=webp&quality=medium "US diesel prices cross $6 per gallon for first time, surge 61% in a year amid Middle East conflict")
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The price surge is driven by power trucks, trains, ships, farm machinery and construction equipment. Higher diesel prices can also increase the cost of mobile goods and operating businesses.
Diesel's average price in the United States has jumped to $6 a gallon. This marks the first time the price has surged in fuel costs, as the war including the US, Israel and Iran, and disruptions at Russian refineries have strained the global supply chain. GasBuddy reports indicate that the US national average had crossed $6 a gallon on Friday, prompting AAA to put the average price at $5.98 a gallon on the same day, rising 61 per cent from $3.71 last year.
The price surge is driven by power trucks, trains, ships, farm machinery and construction equipment. Higher diesel prices can also increase the cost of mobile goods and operating businesses. Meanwhile, Benchmark Brent crude oil price also rose more than $100 a barrel on Friday amid escalating conflicts in the region. Amid this, Brent crude oil price settled at $107.63 a barrel; however, the price of the US West Texas Intermediate crude oil settled at $102.48.
While crude oil remains the main factor behind fuel prices, the recent spike in diesel prices is being made worse by a shortage of refined fuel. The escalating conflict involving the US, Israel and Iran has disrupted oil shipments through the Strait of Hormuz, a key global energy route that typically carries around one-fifth of the world's oil supply.
Strain in diesel market due to disruptions in Russia's refining capacity
The diesel market is under further strain due to disruptions in Russia's refining capacity, caused by repeated Ukrainian drone strikes on the country's energy infrastructure. Adding to this, Russia has restricted diesel exports, cutting down the fuel available to global markets, while China's own export restrictions have tightened supplies even more. As a result, diesel prices have climbed faster than gasoline prices.
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According to AAA data, the average US gasoline price stood at around $4.28 a gallon on September 10. This price surge is happening even though US refiners are running at high utilisation rates. Data from the US Energy Information Administration shows that US diesel inventories stood at 106.3 million barrels, about 13 per cent below the five-year average.
