US diesel hits record $5.90 a gallon as war damage to refineries cuts supply
US diesel is a record $5.90 a gallon, AAA said Monday, up about 30 cents from a week earlier after damage to Gulf refineries during the war with Iran cut into supply. Gasoline set its own holiday record, with the national average at $4.14 over the weekend and regular running $5.59 at a station in Chicago's Ukrainian Village. For haulers and jobbers, that diesel number resets delivered costs and freight rates over the next few weeks.
Diesel runs trucks and heavy equipment, so a 30-cent jump in seven days pushes through the whole delivery chain. AAA and news reports tie the move to strikes on Russian refineries and the earlier hits on Iranian supply, both of which have tightened the distillate market. Retail diesel at $5.90 also means card fees and taxes ride on a bigger base, so the delivered cost climbs faster than the crude move alone.
For c-store operators the gas record cuts both ways. High street prices can fatten fuel margins when wholesale lags the pump, but $4-plus gas also pulls cash out of the store, where the real money is. AAA put the weekend national average more than 30 cents above the old 2012 Labor Day record and close to a dollar over last year's holiday.
Refiners chose diesel
The tight diesel market is now cutting into shipping fuel. Refiners are prioritizing diesel over fuel oil for ships, and Energy Aspects, quoted by Reuters, puts the bunker shortage at 218,000 barrels a day this quarter, with Asia hit hardest. That would be the first quarterly shipping-fuel shortage since 2025, when the gap was just 6,000 barrels a day.
For a US operator, when barrels get pulled toward diesel, everything downstream of the crude barrel gets tighter and pricier, which keeps a floor under what you pay.
Goldman's $120 scenario
Goldman Sachs said crude could reach $120 a barrel if attacks on Middle East shipping widen. Daan Struyven, co-head of commodities research, told Bloomberg the risk of shipping disruptions broadening "is an important one." WTI was around $92.14 and Brent $96.89 in early Monday trade, both up on the session.
What matters for that scenario is the fighting around Gulf shipping. US Central Command struck three Iranian oil tankers over the weekend after the IRGC targeted two US warships, and Iran vowed to hit back. Those strikes and Iran's threat bear on the tanker routes through the Strait of Hormuz, the passage the market is watching. Ukraine also struck Russian refineries far inside the country, at Ryazan and in Perm and Tatarstan, per Zelensky, which adds to the supply loss but is nowhere near the Gulf.
Goldman calls $120 a scenario rather than a base case. At $92 crude and record diesel, there is little cushion if Hormuz gets worse.
What to watch
OPEC laid out an October output plan; whether that adds real barrels or just paper decides how fast crude could ease. Qatar has six empty LNG carriers heading toward the Gulf, a sign QatarEnergy may restart loadings through Hormuz, which would show the strait is passable for now. Watch whether gas holds above $4 into the fall, with CNN and others reporting drivers already stretched and pump prices feeding cost-of-living anger ahead of November. If crude stays near $90 and refineries stay down, diesel could hold at or above record levels through the quarter.