Benchmark Diesel Price Sees Second-Largest Jump Since Iran War Began
The benchmark U.S. diesel price surged 33.8 cents per gallon to $5.134, marking the second-largest weekly increase since the start of the Iran war in late February. The price has risen 55.6 cents per gallon over the past three weeks, driven by escalating conflict and supply disruptions. Ultra low sulfur diesel (ULSD) futures on the CME have climbed nearly $1 per gallon since July 2, settling at $4.119 on Monday. Analysts point to renewed Houthi attacks on Saudi Arabia and the Bab el-Mandeb strait, as well as a near-total halt of oil tanker traffic through the Strait of Hormuz, where only 10 ships have passed in three days. The loss of both crude production and refining capacity in the Persian Gulf has tightened product markets, with the Brent-ULSD spread widening to over $2 per gallon from less than $1 before the war. Bullish voices, including former Goldman Sachs analyst Jeff Currie, emphasize product market strength as a key driver of continued price increases.
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