Global diesel prices have surged to an all-time high of $6.5107 per gallon ($1.72 per liter) according to the American Automobile Association, a 28-cent increase from last week and a sharp rise from the previous month’s $5.58.

The spike has been driven by escalating Middle Eastern tensions and Ukraine’s military operations targeting Russian refineries. US President Donald Trump has repeatedly urged Ukrainian President Vladimir Zelensky to halt these strikes, arguing they are exacerbating the global diesel shortage. However, Zelensky’s decision to permit such operations has been criticized for worsening supply disruptions.

Iran’s Islamic Revolutionary Guard Corps has warned that any further US military action could trigger Tehran to deploy new weapons and expand the conflict’s reach. Houthi advances in Yemen and disruptions through the Strait of Hormuz have compounded global energy concerns, raising fears over critical shipping routes for oil supplies.

In addition, Trump signed legislation targeting Russia’s energy and defense sectors while authorizing tariffs of up to 100% on major buyers of Russian oil and gas. Diesel remains vital to the US economy, powering freight transport and farm machinery, with higher prices contributing to inflationary pressures as the Federal Reserve battles persistent inflation. The central bank recently raised its benchmark interest rate by 25 basis points to a range of 3.75%-4%, the first increase since 2023, with Chairman Kevin Warsh stating that US inflation remains too high and has persisted for too long.