Diesel Price Spike Threatens Trump's Inflation Fight
US President Donald Trump's administration is facing a new challenge in its fight against inflation: rising diesel prices. Unlike crude oil or petrol, diesel rarely makes headlines, but it now has the president's full attention due to spiking prices that threaten to push inflation higher.
Diesel is the fuel that keeps the global economy moving, powering trucks that stock supermarket shelves, ships that carry goods around the world, and machinery that drives farms, factories, and construction sites. However, energy infrastructure - particularly refineries - has become a key target in conflicts between Russia and Ukraine as well as the expanding war in the Middle East.
Air strikes have damaged several refineries in the Gulf this year, forcing facilities to cut operating rates after losing access to feedstocks. Diesel exports from the region fell by more than 50% between March and August. In July, Moscow imposed a diesel export ban due to years of Ukrainian drone attacks crippling 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 hole that the rest of the world has struggled to fill. Prices have responded accordingly: European diesel futures hit a record $210 a barrel in September, while US retail diesel prices topped $6 a gallon for the first time.
The price spike is more worrying than the rise in US petrol prices, which are around $4.40 per gallon. That's because diesel has more potential to ripple through supply chains for months or years, raising costs for manufacturing, transporting food and other goods, and construction.