Diesel prices across the globe surged to multi-year highs as the war on Iran expanded across the Middle East, pressuring markets already grappling with low supplies and adding to the burden on consumers.<\/p>\n
In Europe, benchmark diesel futures jumped by a record 34% in two days. Futures in the US surged as much as 16% on Tuesday to $3.37 a gallon, the highest since September 2023. The average retail price reached a level last seen in May 2024.<\/p>\n
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Prices for diesel have reacted strongly to the conflict in the Middle East, in part because the Strait of Hormuz is a key route for large volumes of the fuel produced at nearby refineries. The shipping constraints are tightening the global market, with supplies already low on the US East Coast after an abnormally cold winter. Transit costs are also soaring: The rate for carrying petroleum product from the Middle East Gulf to Northwest Europe jumped to its highest since 2024 on Monday.<\/p>\n
Soaring prices for diesel \u2014 often referred to as a workhorse of the global economy because of its wide use in freight, power and heating \u2014 will add to the cost of transportation, a key component of inflation. With gasoline prices also rising, the increase in fuel costs is a risk for President Donald Trump and the Republican Party as midterm elections loom later this year. Europe, where diesel is also used in passenger vehicles, has become increasingly reliant on fuel from the Middle East after cutting its reliance on Russian diesel in response to the war in Ukraine.<\/p>\n
Benchmark diesel futures in Europe settled at $1 009 a ton on Tuesday, a two-day gain of 34% and the highest outright price since 2023.<\/p>\n
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Futures in Europe cost over $40 a barrel more than crude earlier on Tuesday, the widest that premium \u2014 or crack spread \u2014 has been in more than two years, fair value data compiled by Bloomberg show. The fuel\u2019s premium to oil also jumped in the US and Asia.<\/p>\n
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Outright diesel prices have surged as part of a wider oil market rally. But their gains have outpaced those for Brent crude oil, reflecting the Middle East\u2019s importance as a large diesel exporter and supplier to other major refiners.<\/p>\n
Diesel deliveries to Europe from refineries in Asia that were taking crude from the Persian Gulf \u201care now severely at risk,\u201d said Janiv Shah, a vice president for commodity markets at Rystad Energy. \u201cPersian Gulf volume flows to Europe are also risked,\u201d he added.<\/p>\n
In response to shipping issues, some Asian refiners are looking at cutting run rates, which would further weigh on supply chains.<\/p>\n
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Diesel isn\u2019t the only petroleum product experiencing a price surge. In northwest Europe, jet fuel\u2019s premium to crude oil soared north of $60 a barrel, the strongest it\u2019s been since 2022, according to fair value data compiled by Bloomberg.<\/p>\n
While the European Union receives cargoes of both diesel and jet-type fuels from the Persian Gulf, the latter make up a greater proportion of total shipments, according to data from Vortexa compiled by Bloomberg. That means any disruption to these flows is a proportionally bigger threat to the bloc\u2019s overall imports.<\/p>\n
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Elsewhere, the premium of naphtha \u2014 a petroleum product that can be used as a petrochemical feedstock or blended to make gasoline \u2014 in East Asia versus northwest Europe hit a fresh record high in data going back to early 2023.<\/p>\n
Naphtha exports through the Strait of Hormuz were more than one million barrels a day last year, much of which flows to East Asia. So any interruption to that supply will support prices in that region.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n<\/p><\/div>\n