Diesel prices in US and Europe hit record highs, outpacing gasoline

By Xinhua reporters Xu Chao and Zhong Ya

BEIJING, Sept. 22 — In recent weeks, diesel prices in the United States and multiple European countries have hit record highs, rising significantly faster than gasoline prices. Amid volatile international oil markets, the surge in diesel prices has become a focal point of concern.

Unlike gasoline, diesel is more closely tied to global economic activity and carries greater economic impact. Below is an analysis of the overall trend in international diesel prices, the reasons behind their sharper rise compared to gasoline, and the potential consequences.

Overall Trend

United States: According to the latest data from the American Automobile Association, the national average retail price of diesel reached $6.51 per gallon on September 20. In just the past week, the average price rose by more than 40 cents. Compared to pre-conflict levels before the U.S.-Iran war, diesel prices have surged over 70% — far exceeding the less than 40% increase in New York crude oil futures.

Europe: After diesel futures closed at an all-time high earlier last week, prices in several European countries continued to climb, more than doubling since the start of the year. Germany recorded a record diesel price of €2.471 per liter on September 17, while France hit €2.41 per liter on September 20.

Middle East: Data from market intelligence firm Kpler shows that from March to August, the Middle East exported 800,000 barrels per day of diesel — half the volume compared to the same period last year. In 2025, the Middle East supplied over 40% of Europe's diesel import demand.

Asia: According to Reuters, diesel prices in Asian markets have also risen sharply, nearing historical highs and roughly double pre-U.S.-Iran war levels.

Impact on Businesses: Brad Delco, an executive at U.S. logistics firm Hunt Transportation Services, described the recent diesel price movement as "one of the most aggressive and abnormal fuel price swings we have ever seen," noting that the surge has cost the company at least $10 million.

Government Concern: Kevin Hassett, Director of the U.S. National Economic Council, stated: "Current diesel prices are a major concern for us."

Why Are Diesel Prices Rising Faster Than Gasoline?

Market analysts attribute the sharper rise in diesel prices to a combination of factors, including escalating geopolitical conflicts, seasonal demand, and export restrictions.

Common Drivers for Both Diesel and Gasoline

1. Geopolitical tensions continue to squeeze global energy supply:

• The U.S.-Iran conflict has disrupted passage through the Strait of Hormuz, limiting crude oil exports.
• The Russia-Ukraine conflict has seen increased attacks on refinery infrastructure, severely weakening Russia's capacity as a major diesel exporter.

1. High refinery utilization and low inventories in the U.S. and Europe leave little buffer for supply disruptions:

• Kpler reports that European refinery utilization is near multi-year highs.
• U.S. refinery utilization reached approximately 98% in the last week of August.
• According to the International Energy Agency, many refineries are operating at full capacity, nearing their limits.

Unique Factors Driving Diesel

• Rigid demand: Diesel is essential for industrial and agricultural growth, as well as infrastructure and supply chain operations, making its demand less elastic than gasoline.
• Seasonal factors: As the winter heating season approaches, demand for diesel stockpiling has increased significantly.
• Export restriction expectations: The U.S. and Russia are the world's first and second largest diesel exporters, respectively. Russia has signaled plans to extend its diesel export ban beyond the end of September. Meanwhile, several prominent U.S. Republicans have publicly called for a ban on U.S. diesel exports before the midterm elections, intensifying market fears.

Economic Impact

"Consumers pay more attention to gasoline prices, but diesel is the real lifeblood of the economy," said Bob McNally, president of Rapidan Energy Group, in a recent media interview.

Market analysts warn that diesel — used to transport goods, power heavy equipment, and support key industrial sectors — can transmit price shocks from energy markets to corporate costs and inflation more quickly than gasoline. Sustained high diesel prices could deliver a greater economic blow than rising gasoline prices.

JPMorgan recently reported that energy-driven inflation is more closely linked to diesel. Because diesel is tied to freight, construction, agriculture, and industrial activity, cost pressures first hit diesel-heavy sectors such as shipping, farming, construction, and manufacturing, then spread more broadly and rapidly to related businesses. Diesel can drive inflation directly through higher fuel costs and indirectly through rising transportation and distribution costs along supply chains.

McNally added that higher diesel prices ultimately reach consumers through food, consumer goods, and energy costs. "It's a more insidious, more expensive, and more impactful fuel. The higher the price, the bigger the problem."

Patrick De Haan, an analyst at fuel price research firm GasBuddy, warned that if diesel prices remain at current levels, they could become a "silent killer" for the U.S. economy.

Some experts caution that high diesel prices will hit energy-dependent countries in Asia and Africa even harder. According to data cited by the Associated Press, diesel prices in Nigeria have nearly doubled since the U.S.-Iran war began, while prices in Indonesia and Lebanon have risen by over 80% and 70%, respectively. Energy analyst Neil Atkinson said the diesel shortage reflects immense pressure on the global refining system, calling the situation "unsustainable."