Diesel Prices Poised to Stay High for Years Amid Global Shortage

Diesel fuel prices are likely to remain high for at least the next year due to a global shortage of diesel fuel, according to Kansas State University agricultural economist Gregg Ibendahl.

Ibendahl tracks global oil and natural gas prices as drivers for fertilizer and fuel prices. He says that while part of the increase in diesel prices can be attributed to higher crude oil prices, which have risen from the low to mid-$70s to over $100 a barrel, the larger driver is the global shortage.

The price of oil explains about 70 cents of the increase per gallon, but diesel prices are up more than that. Ibendahl notes that 'there just isn't enough diesel fuel in the world right now.'

U.S. refineries are operating at nearly full capacity, but global supplies have tightened sharply due to geopolitical disruptions, including Russia's reduced shipments of diesel fuel after refinery damage from drone attacks during its war with Ukraine.