For only the second time in history, American diesel prices have crossed the $5 per gallon threshold. The culprit is familiar: a geopolitical crisis in the Middle East that has choked off a staggering share of global oil supply.
The US-Israel-Iran conflict, which escalated with military strikes on February 28, has fundamentally disrupted the flow of crude oil through one of the world’s most critical shipping lanes.
How the Strait of Hormuz broke the diesel market
The Strait of Hormuz handles roughly 20% of global oil and gas shipments. The closure of that waterway has removed an estimated 14 million barrels per day from global markets.
Brent crude prices surged over 55% from approximately $72 per barrel before the conflict to nearly $120 at its peak in March. Diesel, which is refined from crude and serves as the backbone fuel of commercial transportation and agriculture, followed crude higher with even more punishing force.
