Diesel Price Shock Hits US Industry and Agriculture

Rising diesel prices are straining US industry and agriculture as the spread between diesel and crude prices in the United States surpasses $100. The Strait of Hormuz closure in February has led to a decline in Middle Eastern oil exports, compounded by global refinery capacity damage due to wars in the Middle East and Ukraine.

Diesel is critical for US transportation, accounting for more than 75 percent of distillate fuel oil consumption, with farmers warning that they will be squeezed by rising diesel costs amid harvest season. The American Trucking Associations announced that trucking activity for July was 0.5 percentage points below the same month in the previous year.

Rural areas are being hit hardest due to their reliance on agriculture and transportation. States such as Wyoming, North Dakota, and Alaska are particularly vulnerable, with the highest per-capita distillate fuel oil consumption in 2024.