The average price of diesel has surged to a new record, spiking to $5.85 per gallon and creating a major issue for Donald Trump as the midterms loom.
The ballooning price threatens to further raise shipping costs, which have been spiraling due to Trump’s war in Iran. The previous record was $5.816 per gallon, set in June 2022 under Joe Biden.
Nervous Republicans had already urged Trump to stay out of their districts because his popularity sits in the gutter, and they think it could hurt their campaigns, according to insiders who spoke to Politico.
Soaring diesel prices will not help him at the polls, since the increase can also affect households by putting inflationary pressure on the cost of everyday goods, as they are usually delivered by truck.
Diesel has been rising steadily for weeks, but rose by 17 cents in just the last two days. It typically costs more than gasoline because of higher taxes, stricter environmental regulations that require expensive refining, and a lower production yield per barrel of oil.
While the strangling of the Strait of Hormuz had already cast the global market into disarray, Ukraine’s highly effective drone campaign targeting Russian refineries has put further strain on worldwide diesel refinery capacity.
“Until that refining supply picture improves, both gasoline and diesel prices face continued upward pressure,” Patrick De Haan, head of petroleum analysis at GasBuddy, told Axios.
The diesel crack spread, the price difference between a barrel of crude and the refined product, has hit unprecedented triple-digit highs lately.
The spike raises production costs in diesel-dependent industries like fishing, farming and construction. For farmers, it is a double whammy, with the war also driving fertilizer costs higher.
In June, Trump signed a proclamation temporarily suspending certain duties on certain phosphate fertilizer imports to give American farmers some breathing room.
But disruption in the Gulf after the president’s renewed attack on Tehran has since heaped pressure on the global nitrogen market, and the record diesel price comes as the energy-thirsty peak of harvest season looms for corn and soybeans, the nation’s largest farm commodities.
Diesel also fuels the country’s trucking fleets. While large carriers like FedEx and UPS have raised their fuel surcharge rates to account for the spike, smaller businesses are far more exposed to the volatility.
“They are the first to feel it when prices jump,” said George O’Connor, public affairs director at the Owner-Operator Independent Drivers Association.
This time of year, the United States would usually see significant increases in diesel inventory ahead of the fall refinery maintenance season, said Jason Miller, a professor of supply chain management at Michigan State University.
“We could be looking at some basically unprecedented low diesel inventories for that time of the year when we start getting into refinery maintenance season,” Miller said. “Lord forbid we have a catastrophic hurricane.”
If the price hikes show up in core goods rather than just retail gasoline or electricity, that could make it harder for the Federal Reserve to justify cutting interest rates, or even push them higher.
“The Fed is in a box here,” said John Kilduff, founding partner of Again Capital. “They are going to be staring down an inflation pulse now from this renewed price spike.”
Top Republican pollsters, meanwhile, have advised some vulnerable incumbents to avoid talking about Trump on the trail altogether, according to three people with direct knowledge of the matter.
“We’ve told them he cannot come,” said a senior Republican involved in a competitive House race in a district Trump won by double digits in 2024.
“Candidly, he would not be helpful here. I do not believe they would send him without our OK. And if they did, we probably wouldn’t campaign with him.”
