US diesel below $6 a gallon at 2-month low on easing tensions, weaker demand
- Diesel had surged as the US-Israeli war against Iran disrupted oil supplies and Ukraine’s systematic attacks on Russian refineries stymied production
US diesel prices have dropped below $6 a gallon, retreating from record highs. This decline is attributed to easing geopolitical tensions, seasonal demand weakness, and falling crude oil prices.
- Causes of the previous surge in diesel prices.
- Impact of high fuel costs on inflation and midterm elections.
- Seasonal and market factors contributing to the current price drop.
NEW YORK: US diesel prices fell below $6 a gallon on average on Saturday after two months above that threshold, retreating from record highs as easing geopolitical tensions and seasonal demand weakness reduce pressure on fuel markets.
Diesel had surged as the US-Israeli war against Iran disrupted oil supplies and Ukraine’s systematic attacks on Russian refineries stymied production.
Elevated diesel prices, a key driver of transportation and freight costs, have boosted overall inflation, causing pain for consumers, farmers and businesses. High fuel costs were a major factor helping Democrats sweep both houses of Congress from President Donald Trump’s Republicans in this month’s midterm elections.
The national average retail diesel price was $5.998 on Saturday, according to fuel price tracker GasBuddy. It had risen to $5.820 a gallon on September 3, breaking the record set after Russia’s full-scale invasion of Ukraine in 2022. Diesel topped $6 a gallon on September 10 and hit a record $6.519 on September 22.
In California, where refining capacity is constrained and fuel specifications are more stringent than elsewhere in the country, diesel prices briefly exceeded $10 a gallon.
The Trump administration has introduced several measures aimed at easing costs, including temporarily lifting federal taxes on red-dyed diesel, easing sanctions on Russian fuel and launching an $8 billion support program to help farmers offset higher fuel costs during the autumn harvest.
Those measures, however, provided only limited relief as supply concerns caused by the ongoing Iran war continued to dominate the market.
Seasonal factors and a drop in crude oil prices, to which diesel prices are closely linked, are now helping bring prices down. Brent crude futures are down 18.5% over the past two weeks.
Demand typically softens in the autumn as people drive less, hurricane season winds down and the risk of Gulf Coast refinery disruptions declines, said Patrick De Haan, GasBuddy’s head of petroleum analysis.
Refinery maintenance is also largely completed by November, allowing production rates to recover, he said.
These factors have also contributed to gasoline falling below $4 per gallon this month for the first time since August 10, according to GasBuddy data.
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