The price of wholesale diesel fuel rose sharply Tuesday and has remained higher this week despite Trump administration initiatives aimed at increasing supplies before the midterm elections scheduled for Nov. 3.
“Absolutely stunning price spikes in wholesale diesel today,” longtime oil markets analyst Tom Kloza wrote Tuesday on X. “US retail diesel price record of $6.53/gal could be topped by the midterms,” wrote Kloza, adviser at energy consultancy Gulf Oil, soon after the market began trading on Tuesday.
The price of ultra-low-sulfur diesel futures for delivery in November on the New York Mercantile Exchange, a good indicator of pump prices in two to three weeks, jumped almost 20 cents per gallon or 5% in little more than two hours on Tuesday.
The big spike in wholesale diesel prices came on the first day of trade at the New York Mercantile Exchange after the Columbus Day holiday weekend, as energy traders reacted to President Donald Trump’s Friday afternoon announcement of a deal with Vladimir Putin to temporarily lift sanctions on Russian fuel exports. The deal potentially allows 300,000 tons of diesel to reach world markets “immediately” and another 100,000 tons in November.
Moscow extended a one-month ban on diesel exports for the third time on Sept. 30 as Ukrainian drones and missiles continued to strike Russian refineries, causing severe shortages of the distillate fuel across the country’s western regions, including the Moscow and Leningrad oblasts, and at major southern agricultural hubs like Krasnodar during the fall grain harvest.
If immediately shipped from Russian Baltic ports or Black Sea export terminals, the first diesel shipments from Russia would likely reach the U.S. East Coast and Gulf Coast on Nov. 1 or Nov. 2.
While wholesale diesel prices rose sharply across the United States on Tuesday, the increases varied from region to region, energy analyst Kloza noted. “Up 18cts/gal Gulf Coast and East Coast; but up 28cts/gal in Southern California and 25-30cts/gal in Great Plains and Great Lakes,” Kloza posted Tuesday on X. “Market clearly not believing that Russian oil is on the way.”
On Thursday, the retail diesel fuel prices paid by motorists, truckers and farmers averaged $6.32 per gallon, up from $6.28 the previous week but down from a record high of $6.53 on Sept. 21, according to price data compiled by AAA.
The U.S. average price of retail diesel fuel is up almost 70% since the United States and Israel attacked Iran on Feb. 28, while the cost of unleaded gasoline has risen by about 45% in the same period.
The retail diesel price in California averaged $8.43 per gallon Thursday morning, while drivers in Mississippi paid $5.86 for a gallon.
A Thursday survey by the California Farm Bureau showed that 40% of the state’s farmers are scaling back field operations due to near-record diesel costs. “Diesel powers the equipment that plants, irrigates, harvests and transports our food,” said California Farm Bureau President Shannon Douglass. “These survey results show the financial pressure fuel costs are placing on family farms across California. Farmers won’t survive if something doesn’t change.”
In Iowa, as the corn harvest reached 14% completion according to the USDA, the state’s farmers and other retail diesel buyers paid an average of $6.07 per gallon. In neighboring Indiana, where the corn harvest is 34% complete, the average Thursday was $6.62 per gallon.
With Illinois corn harvest now past the halfway point at 51% complete, according to the USDA, the statewide average price of diesel Thursday was $6.57 per gallon, a record high.
On Oct. 5, President Trump signed an executive order allowing tax-exempt, red-dyed diesel, which is normally restricted to off-road equipment and farm machinery, to be used legally as fuel by vehicles on American highways through the end of 2026.
The American Trucking Associations, however, told its members using the fuel might not be worth the risk, noting that most retail truck stops lack the dedicated tank infrastructure or automated tax-clearing systems to distribute the red-dyed diesel fuel without triggering IRS audits.
GasBuddy petroleum analyst Patrick De Haan said Wednesday the core problem is there is not enough diesel supply, noting that scheduled seasonal refinery maintenance after the summer driving season is causing price volatility at the pump.
“Pricing impacts will likely spill into Washington, Oregon, Nevada, and Arizona, as well as California,” De Haan told the Daily Caller News Foundation in an interview published Wednesday. “A high level of refinery maintenance is impacting the West Coast, and it is diesel that is seeing larger impacts right now.”
The International Energy Agency said Wednesday that global diesel markets could remain tight past the middle of 2027, with resulting high prices driving inflation and hurting economic growth, as conflicts curb output from the Middle East and Russia.
“Record diesel prices are already having broad economic consequences by raising the cost of goods and impacting real incomes, economic activity, and inflation,” the Paris-based agency stated in its Wednesday report.
