Diesel Prices Just Posted Their Second-Biggest Jump Since the War Began
Fuel surcharges are about to feel this one.
The benchmark diesel price that most carriers use to calculate fuel surcharges just took its second-largest one-week jump since the Iran war started. According to the Department of Energy/Energy Information Administration, the average retail diesel price climbed 33.8 cents per gallon to $5.134/g in Tuesday’s report — the biggest increase since the 96.2 cent/g spike recorded back on March 9.
The number that matters for freight: the benchmark is now up 55.6 cents/gallon compared to just three weeks ago. If your fuel surcharge tables haven’t caught up yet, they’re about to.
Why it’s happening
Retail prices are playing catch-up with what’s already happened in the futures market. Ultra low sulfur diesel (ULSD) on the CME exchange bottomed out at $3.1822/g on July 2 and has been climbing hard since — up in 7 of the last 11 trading sessions, including single-day jumps of 39, 27, and 19 cents. Monday’s ULSD settlement of $4.119/g was its highest since May 19, putting the contract up nearly $1/gallon since that July 2 low.
What’s driving the market
The Strait of Hormuz is effectively closed. Kpler’s lead energy analyst says oil tanker exports out of the strait have fallen to as few as 10 ships over three days — mostly Iranian cargo still trying to move.
A new front may be opening. Reports of possible Houthi attacks on Saudi Arabia and the Bab el-Mandeb strait are raising concern about Saudi’s ability to reroute oil exports through the Yanbu pipeline terminus.
It’s not just crude — it’s refined product. Analysts point to the spread between Brent crude and ULSD, now near $2/gallon versus under $1/gallon before the war. Lost refining capacity in the Gulf region is squeezing product supply even where crude keeps flowing.
One veteran commodities analyst summed up the shift bluntly: this isn’t a deficit anymore — it’s a shortage.
The takeaway for freight
If the futures market keeps this pace, another $1/gallon move in ULSD could show up within days — and retail diesel, and your fuel surcharges, will follow. Carriers and shippers locking in rates or reviewing surcharge tables this week should build in room for continued upside, not just the increase already posted.
