The average price of a gallon of diesel fuel across the U.S. hit $5.375 as of March 23, according to Energy Department figures, as the Iran war continues to affect crude oil prices. That’s nearly $1.81 higher than a year ago and 30.4 cents higher than the previous week.
Average prices were over $5 in every region the Energy Information Administration tracks, and $6.87 in California.
The lowest average price was found in the Gulf Coast region, as is typical, at $5.134 per gallon.
In the past month, the average price of diesel has shot up by nearly $1.57, up from $3.809 as reported on February 23.
On-highway diesel fuel started the year at an average of $3.477 per gallon. It had been creeping up slowly until the Trump administration and Israel struck Iran at the end of February.
Why Are Diesel Prices so High?
On February 28, the United States and Israel attacked Iran after weeks of military buildup and threats from President Trump, as the nonpartisan think tank Council on Foreign Relations explains.
Iran effectively blocked the crucial Strait of Hormuz, through which flows about one-fifth (20–25%) of the world’s daily oil consumption.
Crude oil prices, traded on the futures market, have been volatile since the strikes, thanks to conflicting reports nearly daily of the status of the war.
Crude oil makes up about 41% of the price of a gallon of diesel as of January figures.
In the past month, the average price of diesel has shot up by nearly $1.57, up from $3.809 as reported on February 23.
Energy Information Administration
As Reuters reports, the war has caused one of the biggest disruptions to energy supplies in history.
Not only has Iran essentially closed the key Strait of Hormuz shipping route, through which a great deal of the global crude oil supply flows, but also, attacks in the Middle East have damaged production infrastructure in several countries.
The BBC reported that the head of the International Energy warned the war could see the world facing its worst energy crisis in decades.
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