AhlulBayt News Agency: Diesel has emerged in recent weeks as one of the clearest indicators of turmoil in the global energy market amid tensions between the United States and Iran. Falling supplies and prices climbing to unprecedented levels have raised concerns that the crisis could spread to transportation, shipping, agriculture and industry. Ultimately, the disruption could drive up the cost of goods and fuel inflation worldwide.
data from the International Energy Agency (IEA) show that global supplies of diesel and gasoil fell by around 1.5 million barrels per day in the second quarter of this year compared with the same period last year. The decline reached 1.7 million barrels per day in the third quarter.
The agency’s report indicates that benchmark wholesale diesel prices in Europe and the United States have approached $220 per barrel, while prices in Singapore have exceeded $200. Global diesel prices have climbed to nearly twice the price of crude oil.
Global exports of diesel and gasoil fell by approximately 700,000 barrels per day in September compared with the same month a year earlier. Combined exports from Russia and the Middle East also declined by around 1.3 million barrels per day, reaching approximately 820,000 barrels per day.
In the United States, data from the Energy Information Administration show that inventories of distillate fuels, which include diesel, were around 13 per cent below the five-year average in the week ending September 11.
The average retail price of diesel reached $6.30 per gallon, its highest nominal level since the data series began in 1994.
Meanwhile, US refinery utilisation rose to 97 per cent, and average distillate fuel production between January and August 2026 stood at around five million barrels per day—the highest level since 2019.
Strait of Hormuz: A Factor Intensifying the Supply Crisis
Fuel supply disruptions have become particularly significant because of the Strait of Hormuz’s role in global energy trade. Last year, around 20 million barrels of oil and petroleum products passed through the strait each day, equivalent to nearly one-quarter of global seaborne oil trade. Approximately 80 per cent of these shipments were bound for Asian markets.
George Shaw, a senior analyst covering middle distillates at Kpler, said the rise in diesel prices was linked to reduced refining capacity in the Middle East and disruptions to shipping through the Strait of Hormuz. These factors, he said, were intensifying the global shortage of the fuel.
Shaw explained that higher diesel prices reflected pressure on market supply, as well as concerns about the continuation of tensions and rising maritime transport costs. However, he noted that higher prices were also affecting demand, pointing to reduced diesel consumption in Europe during periods of price increases.
The analyst warned that a prolonged crisis would raise transportation, production and shipping costs, eventually affecting the prices of goods and inflation. He stressed that diesel is an essential fuel on which broad sectors of the economy depend, making it difficult to replace.
Consumers Under Pressure from Rising Prices
Shaw added that some wealthy economies, including France and Germany, had turned to tax cuts to reduce the impact of rising prices on consumers. Refining companies, meanwhile, are benefiting from higher profit margins, while consumers bear the brunt of increased fuel costs and their broader economic consequences.
The price surge comes amid continued uncertainty over the future of global fuel supplies. Geopolitical developments in the Middle East are adding pressure to energy markets, while attacks on energy infrastructure in Russia and Ukraine have also contributed to instability in the diesel market.
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