Gas up 5 cents to $3.84, diesel up nearly 15 as U.S.-Iran fighting resumes
Pump prices turned back up this week. AAA says the national average for regular gasoline rose 5 cents overnight on July 8 to $3.84, reversing a slide that had been running since late May, when the average peaked at $4.56 on May 21. Diesel moved more, up nearly 15 cents. Both are tracking the renewed fighting between the United States and Iran, and for jobbers and haulers diesel is the number that matters now. It feeds into delivery runs and freight contracts before anyone raises a rack price.
Refining margins
Refining margins for gasoline and diesel jumped to record highs this week, per OilPrice.com. The spread over crude is wide even with crude itself parked in the low $70s, which points to a tight fuel market. Two forces are pushing the cracks beyond the war headlines: Russia banned diesel exports, and global fuel inventories keep drawing down.
For anyone buying rack product, wide margins mean good news for the refiner and a bigger bill for you. When the crack widens like this, the pump and the rack move up well ahead of any change in crude, so retail street pricing gets squeezed from both sides. C-store operators running thin fuel margins to drive inside sales have less room this month.
The crude picture
Brent was around $76.60 a barrel and WTI $72.37 heading into the weekend, both set for a weekly gain, though a modest one against the four-week slide that had brought benchmarks back to pre-war levels. The IEA warned Friday that the re-escalation could flip its forecast of an oil surplus for next year. If that surplus doesn't show up, the price cushion it implied gets thinner.
Worth keeping in perspective: the U.S. remained the world's largest crude producer in 2025, per EIA, extending a streak that started in 2018. Record domestic output still doesn't insulate the pump. Gasoline and diesel price off global benchmarks and imported product, so a shipping disruption on the other side of the world can add a nickel here overnight.
Hormuz shipping
Traffic through the Strait of Hormuz is the swing factor. Kpler data cited by Reuters shows LNG carriers still transiting despite the renewed hostilities, with about half a dozen entering and six exiting in recent days, four of them tied to Qatar. An earlier report had at least four tankers turning back. Crude is moving too, with millions of barrels getting out even as margins point to a tight market. Add the drone strikes on Russian refineries at Moscow and Kapotnya, which take more product capacity offline at the wrong moment, and supply looks tighter than the crude price alone suggests.
What to watch
Whether the ceasefire holds is the near-term question, and AAA notes prices were already ticking up before the latest round of attacks. If Hormuz stays open and vessels keep transiting, crude could ease back toward where it sat before the flare-up. If the fighting widens or shipping backs off the strait, diesel could run further than crude, given how wide the cracks already are. Watch the diesel rack more than the crude screen this week, and reprice delivered freight while you can.