09/28/2026
Kyle Conway
AI content
September 19 at 5:04 PM
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Everybody wants to blame $6 diesel on Trump and the Iran war. I don't buy it, and if you look at the actual numbers I don't think you will either.
Diesel hit $6.40 a gallon this week. That's the highest it has ever been in this country. The old record was about $5.80 back in June of 2022, and this time last year we were paying $3.69. So it costs almost twice what it did a year ago to run anything with a diesel engine in it.
If Iran was the main thing driving this, you'd expect diesel to follow crude oil. It hasn't. Brent crude peaked around $125 a barrel back in April, and diesel wasn't even at a record then. Crude has come back down to about $103 and diesel went and broke the all-time record anyway. Since the war started, Brent is up around 45%. Wholesale diesel is up around 94%. Those two numbers should look a lot closer than that if this was an oil problem.
Gas tells you the same thing. Gas and diesel come out of the same barrel of crude. Gas is up too, sitting around $4.40, but diesel is running about two bucks over it. Most years that gap is somewhere between 50 cents and a dollar. Something is squeezing diesel specifically.
It's the refineries. Traders watch a number called the crack spread, which is basically what a refiner gets for turning a barrel of crude into diesel. Before all this it ran around $20 a barrel. On September 1st it went over $100. That's the tell right there. The world isn't out of oil. It's short on the ability to turn oil into diesel.
And that's where Russia comes in.
Russia is one of the biggest diesel refiners in the world. Going into this year they were shipping around 10% of all the diesel that moves by sea. Ukraine has been hitting Russian refineries with drones all year, more than 70 strikes since January and a record 21 in August alone. Russian refining just dropped to its lowest level in over twenty years. Their diesel production fell 23% in August. Their diesel exports went from over 800,000 barrels a day last year to about 50,000 by the end of July. That's a major supplier basically falling off the map.
It got bad enough over there that Russia banned diesel exports in July because they couldn't cover their own needs. The ban was supposed to end August 31. They pushed it to September 30, and there's already talk in Moscow of running it through the end of the year.
Now somebody's going to say we don't buy Russian diesel, so why does it matter here? It matters because diesel is a world market. When one of the biggest sellers on the planet drops out, the countries that were buying from Russia don't just go without. They go buy from everybody else, and that includes our refineries down on the Gulf Coast. Every barrel that gets shipped overseas is a barrel that isn't sitting in a tank here, and the price at your pump has to compete with what Europe is willing to pay for it.
We can't just make more, either. U.S. refineries were running at 98% at the end of August. A year ago it was about 94.6%. They're maxed out. On top of that, jet fuel comes out of the same part of the barrel as diesel and it's paying well right now, so some of that production is getting pushed toward jet.
To be fair, Iran didn't help. The Strait of Hormuz has been mostly shut for six months and that took a lot of oil and fuel off the market. It's a big part of why crude spiked to $125 in April. I'm not saying it had nothing to do with it. I'm saying crude came back down and diesel kept climbing, and what lines up with diesel's run is Russia's refineries getting knocked offline.
The people who pay for it are the ones who can't get around it. This country burns about 120 million gallons of diesel a day. Every dollar the price goes up is roughly $120 million a day coming out of somebody's pocket. It's the semi hauling your groceries. It's the tractor out in the field. Neither one can switch to something else, and neither one can just drive less. You can skip a road trip when gas goes up. A farmer can't skip harvest.
So it rolls downhill. Freight goes up, and then everything that rode on a truck costs more. Some companies are already tacking fuel fees onto online orders and packages. If you farm or haul for a living you already know all this, and you're probably eating a good chunk of it yourself.
I wouldn't count on it coming down any time soon. We're heading into winter, and heating oil is basically diesel, so demand is about to go up right when supply is already tight. If Russia keeps that export ban going through December, it's going to be a long winter for anybody who runs equipment.
Now for my opinion, and you can take it or leave it.
I think these refinery strikes are tied to the midterms. Ukraine will tell you it's about cutting off Russia's oil money, and maybe that's part of it. But look at the calendar. The strikes set a record in August and diesel set a record in September, and the midterms are about six weeks out. Ukraine has no love for Trump, and nothing turns voters against whoever's in the White House faster than what it costs to fill up.
So the next time somebody tells you $6 diesel is Trump's fault, ask them why crude is cheaper today than it was in April.