US Diesel Hits Record $5.85 a Gallon as Iran War Disrupts Fuel Flows

President Donald Trump's approval rating has fallen to 33%, with only 31% of Americans approving of the conflict, according to recent Reuters/Ipsos polling cited by the BBC. In response, the Trump administration announced an oil deal with Venezuela on Saturday. The average price of diesel in the United States reached $5.85 a gallon on Friday, an all-time high, according to the American Automobile Association.

That figure compares with $3.71 a year ago and surpasses the previous record set after Russia's full-scale invasion of Ukraine in 2022. The surge follows six months of war between the US and Iran, which has constrained global fuel supplies. Iran has effectively closed the Strait of Hormuz, a waterway through which about a fifth of the world's oil is transported, according to the BBC.

Russia's extension of a ban on diesel exports last week added further pressure. Ukrainian drone attacks on Russian refineries in August prompted the ban, and Russia normally supplies about 10% of the world's diesel despite western sanctions, the Guardian reported. Farmers in the UK and US are already feeling the strain.

Alex Harrison, a fuel buyer at Fram Farmers, a not-for-profit co-operative representing more than 1,400 UK farm businesses, described the increase as "an astronomical amount in just a few days." Red diesel, used in agricultural vehicles, now costs about £1.10 a litre, up roughly 10% since Monday. "This latest spike has really caught everybody by surprise and hit them quite hard because it's been such a large spike and because of the time of year," Harrison said.

Farmers are ordering fuel in smaller increments more often to manage cashflow and hedge against volatility. Diesel powers most freight and delivery networks, so higher prices raise transportation costs for goods including produce, meat, clothing and furniture. Some businesses have already added fees to online orders and package deliveries, and consumers may see more price increases on store shelves, the Associated Press reported.

In Washington state, average diesel prices hit $6.81 a gallon, compared with $5.03 a year ago, because of tax differences and distance from US oil producers. Petrol prices have also climbed, with the national average reaching $4.15 a gallon versus $3.20 a year earlier. The price spike carries political weight ahead of November's midterm elections.

The agreement calls for development of 17 strategic oil fields with a proven potential of 65 billion barrels, and an investment of more than $100bn, according to Interim Venezuela President Delcy Rodríguez. The US government will retain 55% control of a joint venture with a private operator. Analysts remain sceptical that the deal will quickly ease fuel prices, noting long-running obstacles to investment in Venezuela's oil industry.

Meanwhile, Brent crude traded near $97 a barrel on Thursday, its highest in about six weeks, and two Saudi supertankers were hit in the Strait of Hormuz late Monday, fuelling concerns of further disruption.