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Diesel Prices Surge on Persian Gulf Tensions and Russian Supply Disruptions

Benchmark diesel prices jumped sharply this week, reversing nine consecutive weeks of declines. The Department of Energy reported the average weekly retail diesel price rose to $2.1796 per gallon, though still tracking below levels from four weeks prior. Ultra-low sulfur diesel futures climbed over 20% in six trading days, settling Monday at $3.8236 per gallon after hitting intraday highs above $4. Military activity in the Persian Gulf and uncertainty surrounding Strait of Hormuz traffic are fueling market volatility. Compounding supply concerns, Russian refinery output has fallen to 21-year lows following attacks on infrastructure. Refining capacity has dropped to approximately 3.8 million barrels daily, with 4.3 million barrels of capacity offline. At least 25 Russian refineries have been targeted, further constraining global diesel supplies and extending Moscow's export restrictions.