Diesel hits record $5.85 a gallon as refinery shortage and two wars tighten wholesale supply
The national average for diesel hit an all-time high of $5.85 a gallon Friday, up from $5.78 Thursday, according to AAA. For anyone buying at the rack, that is the number that matters this week. The climb started in late February with the Iran war and the crude spike that came with it, and it has kept going as the Russia-Ukraine war grinds through its fourth year. Russia is the world's second-largest diesel exporter after the United States, and Ukrainian drone strikes on Russian refineries have pulled barrels out of an already short global market. Add a worldwide refinery shortage and higher seasonal demand, and the rack is where the pressure shows up first.
Supply and allocation
Jobbers should expect thin availability and wider branded-to-unbranded spreads while this holds. When the export market tightens, US product that would have moved abroad stays home, but a refinery shortage means there is less of it to go around at the same time. Marketers running tight on contract volume could see allocation talk from suppliers if the seasonal demand bump keeps building into fall. Watch your rack differentials daily, because a day-over-day jump like the one from $5.78 to $5.85 means the wholesale side is moving faster than the pump.
Labor Day gas
Gasoline is setting its own record. AAA says Labor Day pump prices are on track for a record high, and New Jersey gas jumped 20 cents in a week. Holiday driving demand on top of the same crude strength is doing the work here. For c-store operators, the margin squeeze is the familiar one: street prices lag the rack, and a fast wholesale climb thins retail margins until the pump catches up.
E15 in Iowa
Iowa terminals moved more than 46 million gallons of E15 in August, the second-highest monthly total on record, per state fuel-tax data. The Iowa Renewable Fuels Association projects E15 could pass E10 as the state's top-selling fuel in 2026. "It will be close, but E15 is on track to become Iowa's top-selling fuel for 2026," said executive director Monte Shaw. For jobbers in E15 markets, the supply mix at the rack is shifting under you, and blend logistics are worth checking now rather than at peak summer next year.
Hormuz risk
ADNOC kept loading LNG at its Das Island terminal after the latest US-Iran strikes, with tankers running dark, transponders off, Bloomberg reported from satellite data. It matters here only as a crude signal: any real disruption at Hormuz would push the same benchmarks already driving your diesel cost.
What to watch
Whether refinery outages ease, whether Russian export losses deepen, and whether suppliers start formal allocation. Diesel could soften if refinery runs recover, but nothing in this week's data says that is close.