US Average Diesel Price Surpasses $5 Per Gallon Amid Middle East Tensions

Kathmandu. The average retail price of diesel in the United States surpassed $5 per gallon on Monday. This is the second time the price of diesel has reached this level.

The price hike is attributed to limited industrial fuel supply amid escalating conflict across West Asia following attacks by the US and Israel on Iran.

According to GasBuddy, which tracks the fuel market, the national average price of diesel in the US reached above $5 per gallon on Monday. Previously, the retail price of diesel went above this level in December 2022. At that time, the global oil market was affected by Russia's invasion of Ukraine, and the impact was felt in the US as well.

Experts have warned that such an increase in diesel prices could slow down global economic activity. Diesel is a fuel widely used in production and transportation.

As production and transportation costs rise, there is a possibility that the price increase will eventually reach consumers. The military action taken by the US, in coordination with Israel, against Iran in West Asia has significantly impacted the global diesel supply chain.

Iran's near-total blockade of the Strait of Hormuz has affected up to 20 percent of global marine diesel supply. Furthermore, reduced flow of Middle Eastern crude oil to Asian refineries has led to production cuts, further impacting diesel availability.

Although US President Donald Trump and other world leaders have taken steps such as drawing from strategic reserves, these measures have not significantly curbed the price increase so far. In the same vein, the average US gasoline price has reached $3.76 per gallon.

In the US, gasoline prices have climbed to their highest level since October 2023. According to Patrick De Haan, Head of Petroleum Analysis at GasBuddy, upward pressure on fuel prices is likely to persist until oil flow through the Strait of Hormuz sufficiently resumes.