US diesel hits $4 per gallon mark as Middle East conflict drags on
By Nicole Jao
NEW YORK, March 4 (Reuters) - Average U.S. diesel prices surpassed $4 a gallon for the first time in nearly two years on Wednesday as the U.S.-Israel war with Iran dragged on.
The conflict in the Middle East has disrupted global oil supply and paralyzed shipping through the Strait of Hormuz, a key global trade route that roughly 10% of global diesel supply passes through.
The national average price of diesel crossed $4 a gallon for the first time since April 24, 2024, according to market tracker GasBuddy data.
"We could see the average rise to $4.25-$4.45/gal in the days ahead, but any new developments could push the needle either way," said GasBuddy analyst Patrick De Haan.
U.S. diesel futures HOc1 hit $3.45 at their peak on Wednesday, the highest since September 2024.
Diesel inventories have remained in tight supply globally due to a structural shortage of refining capacity, making it more sensitive to the conflict in the Middle East than other fuels, said Alex Hodes, director of market strategy at StoneX.
The disruption of Middle East crude oil also disproportionately affects distillate supplies because crude oil from the region tends to be more distillate-rich grades, Hodes added.
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