Trump's Diesel Dilemma: Record Prices Threaten Inflation Hike
US President Donald Trump has expressed concern over record diesel prices, which have become an unexpected challenge for his administration. Unlike gasoline, diesel is a crucial fuel that powers trucks, ships, and machinery, accounting for nearly 30% of global oil consumption or about 29 million barrels per day.
The current price spike in diesel is primarily due to the damage inflicted on refineries in the Gulf region and Ukraine's drone attacks on Russia's refining network. As a result, combined diesel exports from Russia and the Gulf have fallen by roughly two-thirds from 2025 levels, leaving a significant gap that other regions struggle to fill.
European diesel futures hit a record $210 a barrel this week, while US retail diesel prices topped $6 a gallon for the first time. The price increase is particularly alarming because diesel has more potential to ripple through supply chains and raise costs for manufacturing, transporting food and goods, and construction.