Diesel Price Surge to Last Years Amid Global Shortage

Diesel prices are expected to remain high for at least another year, squeezing farmers' profit margins and eventually hitting consumers in the pocketbook. According to Kansas State University agricultural economist Gregg Ibendahl, the current shortage of diesel fuel is the main driver behind the price surge.

The global supply of diesel has tightened sharply due to geopolitical disruptions, including Russia's reduced shipments after refinery damage from drone attacks during its war with Ukraine. Ibendahl said that while part of the increase in diesel prices can be attributed to higher crude oil prices, the majority is due to the shortage.

U.S. refineries are operating at about 98% capacity, but global supplies have been curtailed. Ibendahl noted that Russia's inability to refine its own oil easily has led to a reduction in diesel exports to Europe, and strong overseas demand is drawing U.S. supplies offshore.