U.S. diesel hits $6.50 a gallon amid global supply crunch

Investing.com -- U.S. diesel prices have hit a record $6.50 a gallon, adding to inflationary pressures as the Middle East conflict tightens global fuel supplies.

The average price reached $6.505 a gallon on Sunday, according to AAA data, up about $1 in just four weeks.

The surge reflects a deepening global fuel crunch, with supply constraints stemming from the Middle East and Russia, and Brent crude holding near $100 a barrel, despite a 2.7% decline so far on Monday.

Ukrainian attacks on Russian refineries and conflict in the Middle East have squeezed refined product supplies, while limited global refining capacity has amplified the impact.

Gasoline prices have also climbed, reaching $4.48 a gallon, up from $4.10 a month earlier.

Rising diesel costs are particularly significant, given the fuel's role in freight, agriculture and industry, meaning increases tend to ripple through the wider economy.

The jump threatens to impact broader inflation at a sensitive time. The Federal Reserve raised interest rates last week for the first time since 2023, with Chair Kevin Warsh saying "the plain fact is that inflation is too high, and has been for too long."

Higher pump prices also carry political risk ahead of U.S. midterm elections.

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