Diesel prices across the globe surged to multi-year highs as the war on Iran expanded across the West Asia, pressuring markets already grappling with low supplies and adding to the burden on consumers.
In Europe, benchmark diesel futures jumped by a record 34 per cent in two days. Futures in the US surged as much as 16 per cent on Tuesday to $3.37 a gallon, the highest since September 2023. The average retail price reached a level last seen in May 2024.
Prices for diesel have reacted strongly to the conflict in the West Asia, 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 West Asia to Northwest Europe jumped to its highest since 2024 on Monday.
Soaring prices for diesel — often referred to as a workhorse of the global economy because of its wide use in freight, power and heating — 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 West Asia after cutting its reliance on Russian diesel in response to the war in Ukraine.
Benchmark diesel futures in Europe settled at $1,009 a ton on Tuesday, a two-day gain of 34 per cent and the highest outright price since 2023.
Futures in Europe cost over $40 a barrel more than crude earlier on Tuesday, the widest that premium — or crack spread — has been in more than two years, fair value data compiled by Bloomberg show. The fuel’s premium to oil also jumped in the US and Asia.
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 West Asia importance as a large diesel exporter and supplier to other major refiners.
Diesel deliveries to Europe from refineries in Asia that were taking crude from the Persian Gulf “are now severely at risk,” said Janiv Shah, a vice president for commodity markets at Rystad Energy. “Persian Gulf volume flows to Europe are also risked,” he added.
In response to shipping issues, some Asian refiners are looking at cutting run rates, which would further weigh on supply chains.
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Published on March 4, 2026