Diesel prices broke into record territory Friday, topping $6 a gallon for the first time, with the U.S. average hovering around $6.06. In California - the nation's largest agriculture hub - the average is $7.98 per gallon.
Oil is climbing too. On Thursday, U.S. crude futures crossed $100 per barrel for the first time since May, putting them up about 20% for September. That jump comes as fighting between the U.S. and Iran intensified this month.
Truckers and farmers are feeling the squeeze directly. AAA data show costs to refuel semis and tractors are about 63% higher than at this time last year.
Fuel costs are rising as the wars in Ukraine and Iran disrupt global supplies and raise transportation costs across the economy. Kyiv has struck Russian refineries, and Moscow has banned diesel exports. Iran and its Houthi allies in Yemen have attacked refineries belonging to U.S. Gulf partners, and Iranian strikes on tankers have constrained fuel shipments through the Strait of Hormuz.
Valero Chief Operating Officer Gary Simmons said on July 30 that the conflicts have sidelined refineries with roughly 5 million barrels a day of capacity. In a Wednesday note, Andy Lipow of Lipow Oil Associates said nearly 8% of the world's diesel supply has been lost, with scant spare refining capacity to bridge the shortfall.
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RBC's Helima Croft called the spike an "enormous challenge" for the Trump administration. She said "U.S. refineries are running at 98% utilization rates" and there is "just no spare capacity."
Bob McNally of Rapidan Energy told CNBC's The Exchange on Tuesday that diesel is the economy's real workhorse, even if gasoline gets more attention. "It's the more insidious, more costly, and more impactful fuel," he said. "As we climb higher, it is a real concern." Diesel moves goods by truck, train and ship, runs farm machinery, and in some cases heats homes and powers the grid. Higher diesel ultimately filters into what people pay for food, goods and energy.
GasBuddy's Patrick De Haan called diesel at these levels a "silent killer" on CNBC's Power Lunch. He also noted that, this late in the year, gasoline has not previously reached these levels, with a Labor Day record of $4.15 a gallon earlier this week. By his estimate, Americans' daily outlay on gas and diesel is about $700 million higher than a year ago. "There's sticker shock there for consumers," De Haan said.
When diesel jumps, the ripple hits everything that moves or grows. Shipping, groceries, utilities and farm operations all absorb higher costs, and some of that shows up in household budgets. With refineries running near their limits and multiple conflicts squeezing supply, the pressure on prices can stick around.
Companies that haul, harvest or heat with diesel face tighter margins, and consumers feel it at the store and the pump. The key signals to watch now are supply disruptions, refinery outages and utilization rates - the levers that determine whether prices ease or keep grinding higher.
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