Crude Oil

Diesel Prices Are Breaking Records Across Multiple States, And Relief May Not Come in 2026

Wed, 06 May 2026 12:53:38 GMT

On Tuesday, President Trump stated that high gasoline prices are a “very small price to pay” for the ongoing war with Iran, arguing they are necessary to prevent Iran from obtaining a nuclear weapon. He predicted prices will “come crashing down” once the war ends. But for farmers and ranchers, diesel prices have risen more than gas, putting a further strain on already high input costs for 2026.

Trump on Oil Prices:

I looked today, it's like at 102 and that's a very small price to pay pic.twitter.com/2V8LC93wFj
— Acyn (@Acyn) May 5, 2026

To start the week, diesel prices went on another run with the national average diesel price is just 20 cents away from reaching a new all-time high. And across the country, a growing number of states aren’t waiting to get there. About six states are already seeing the national average price of diesel reach record highs.

From the Great Lakes to the West Coast, roughly a half dozen states have already smashed previous records, as a late-April dip in prices quickly faded and a fresh surge took hold.

“Diesel now averaging about $5.65 a gallon nationally. That is only about 20 cents away from a new all-time record high,” says Patrick De Haan, head of petroleum analysis at GasBuddy . “So even though we had that short-lived break, we’re right back knocking on the door of records again.”

That “break” didn’t last long. De Haan says even though diesel prices saw a bit of a respite for April, with even prices starting to trend down in mid-April, those prices re-accelerated in the last week.

New records for diesel in:
Michigan, $6.01
Illinois, $6.01
Wisconsin $5.67
(Indiana 0.2c/gal away), $6.03
(Ohio ~19c/gal away), $5.93 https://t.co/DV0387vvMR
— Patrick De Haan (@GasBuddyGuy) May 5, 2026

Now, the rally is showing up in state-by-state records, especially in the Midwest.

“Looking at it state by state, Great Lakes states have seen some tremendous refining issues that have really caused prices to rise dramatically,” he says. “Michigan has now set a new all-time record high for diesel over $6. Indiana is just a few tenths of a penny away from setting a new all-time record. Illinois has set a new all-time record. Wisconsin has set a new all-time record.”

And it’s not just a regional story. States in the West were some of the first to not just see the highest prices, but now also hit record levels.

“Out on the West Coast, Arizona set a record a couple of weeks ago, and Washington state is at an all-time record,” he adds. “So there are probably about a half dozen or so states that have set new all-time records, and again, the national average itself is just 20 cents away.”

Perhaps the most telling shift, though, is there’s no longer a low-price refuge.

“No states any longer have diesel averaging below $5 a gallon,” De Haan says. “Texas was the last holdout, and it now is above $5 per gallon. So across the board, $5 diesel is now essentially the floor, and in some areas, that’s actually the cheaper end of the spectrum.”

At the high end, prices are reaching extremes with California’s average diesel price now surpassing $8 per gallon.

Global Tensions Cloud Relief Outlook

With prices continuing to climb, farmers are looking for relief. What would it take to reverse course? That answer remains tied to global uncertainty.

“Relief may be a little bit elusive,” De Haan admits. “It really just depends on the daily developments in the situation between the U.S. and Iran—whether the Strait is open or not, or whether we’re in phases of escalation.”

The Strait of Hormuz remains a critical chokepoint for global energy supply, moving roughly 20 million barrels of oil per day.

“Nothing else matters to the oil market more than this waterway,” he emphasizes. “We’ve seen attacks that have pushed oil prices higher, which in turn pushes diesel wholesale prices up. You may get a little bit of day-to-day relief, but there really is no ‘coast is clear’ until there’s some sort of definitive resolution.”

And even then, he says a turnaround won’t happen overnight.

“If there is a definitive signal to the market, if the Strait reopens and both sides are aligned, prices could start falling within 48 hours,” De Haan explained. “But the rate of decline is likely to slow after that initial drop.”

Prices Likely to Remain Elevated Through 2026

Not only is the rate of decline projected to be slow, but De Haan says diesel prices aren’t likely to drop back to pre-war levels by the end of the year.

“Roughly half of the increase we’ve seen over the last couple of months could come down within the first few months of positive news,” he said. “But the other half could take many more months. We may not get back to pre-conflict diesel prices until late this year—or even into 2027.”

For agriculture, that prolonged stretch of elevated prices carries real consequences.

“When you look at what comes out of a barrel of oil, diesel only makes up about 25%,” De Haan explained. “Gasoline is a larger portion, so it’s been less impacted. Jet fuel, which is an even smaller share, has been hit the hardest. So it’s almost inverse to how much is produced.”

Why Diesel Is Climbing Faster Than Gasoline

If it feels like diesel prices are rising faster and hitting harder than gasoline, there’s a reason rooted in how a barrel of oil gets used.

“Diesel has seen more of the sticker shock compared to gasoline,” says De Haan. “And a lot of that comes down to what comes out of a barrel of oil.”

Not all fuels are created equally in supply. Gasoline makes up the largest share of a refined barrel, while diesel represents a smaller slice, making it more vulnerable when supply is disrupted.

“Gasoline is the top product flowing out of a barrel of oil, so it’s been the least impacted,” De Haan explains. “Diesel, on the other hand, only accounts for about 25% of a barrel, so it’s been more impacted when there are supply issues.”

That imbalance becomes even clearer when looking across the full spectrum of refined fuels.

“The most significant impact has actually been to jet fuel, which is only about 9% of a barrel,” he adds. “So if you look at it inversely—the smaller the share of the barrel, the bigger the impact we’re seeing right now.”

For agriculture, that dynamic matters more than most sectors.

Diesel isn’t optional on the farm. It’s essential. From planting to harvest, it powers tractors, trucks and the supply chain that moves commodities across the country.

“Diesel is the fuel that drives agriculture,” De Haan say. “And that’s why these price increases are so impactful, not just at the pump, but all the way through the economy.”

And while prices are already elevated, the full effect is still working its way downstream.

“Consumers really haven’t even seen the full onset of some of these higher prices yet,” he adds. “That’s going to continue to trickle through in the weeks ahead.”

Demand Holding...for Now

Even with these high prices, so far, demand hasn’t shown many signs of slowing.

“We have not seen much meaningful decrease in demand yet,” De Haan says. “We’ve seen very little, if any, diesel demand destruction so far, which tells you the economy is essentially preparing to pay these prices because it still needs the fuel.”

But there are warning signs ahead.

“If diesel nationally hits $6 a gallon, that’s likely when we start to see consumption slow,” he says. “For gasoline, that number is about $5 a gallon. We’re getting very close to those thresholds.”

Until then, the pressure continues to mount. And for farmers heading deeper into the growing season, that pressure is becoming harder to ignore.

Biden to Tap Final 15 Million Barrels of Oil Reserves, but Could Go Further

Wed, 19 Oct 2022 18:16:15 GMT

The U.S. plans to release 15 million barrels of oil from emergency reserves to be delivered in December. The White House says it may consider releasing “significantly” more this winter.

President Biden will announce the plan Wednesday at 1:15 p.m. ET, as high gas prices pose a risk for elections. The move is primarily meant to counter OPEC+'s cuts and price volatility .

The 15 million barrels from the country’s Strategic Petroleum Reserve (SPR) are the final part of a 180-million-barrel release announced in March and does not constitute a further release.

The Original SPR Release Plan

It’s the final tranche of oil from a program the White House began earlier this year, and it plans to replenish the emergency stockpile by purchasing barrels of West Texas Intermediate crude when prices are at or below $67 to $72 per barrel.

The emergency stockpile has the capacity to hold roughly 714 million barrels and contained 405.1 million barrels as of Oct. 14.

Backlash from Biden

Biden has lashed out at energy companies that he said have not lowered prices at the pump as oil prices have gone down. An administration official who spoke to reporters on background ahead of Biden’s announcement said those corporations’ actions are “adding 60 cents to the average gallon of gas, and have kept pump prices higher than they would be otherwise.”

Biden’s team is keeping all options on the table to ensure stable domestic fuel supplies, according to a senior official.

More on oil:

Biden Mulls Options After OPEC+ Moves to Cut Oil Output
Russian Oil Ban on the Horizon, No Near-Term US/UK Trade Deal
DOE Announces Plan to Replenish Tapped Oil Reserves

Russia-Ukraine Crisis Shakes U.S. Markets, Gas and Oil Prices Surge

Thu, 22 Sep 2022 02:56:19 GMT

A war of words between Russia and the Ukraine is now actual war and has significant ramifications on the rest of the world, including the U.S.

There are major implications for U.S. markets, Jim Wiesemeyer, Washington policy analyst for Farm Journal, told AgriTalk guest host Clinton Griffiths Thursday morning.

“As we speak, the Dow’s down 730 points,” Wiesemeyer says. “You saw crude, energy prices in Europe this morning went up a little over 40% in one day. Energy prices from an agriculture perspective across the board are up because of the significance of Russia and Ukraine in the corn and wheat export arena, and over 75% of sunflower oil trade is from that region. So, yes, we have major implications.”

Along with the Dow, the S&P 500 dropped 2.5% on Thursday morning, bringing it deeper into a market correction. The tech-heavy Nasdaq composite sank about 1.5%.

According to a Moneywatch report, oil prices jumped 7.5% on Thursday morning, topping more than $100 a barrel for the first time since 2014, on concerns that the crisis in Eastern Europe could disrupt Russian supplies of crude.

Russia accounts for about 12% of the world’s oil supply and provides about 40% of gas to the European Union. Most of that fuel is delivered through pipelines, including in Ukraine, according to Eurasia Group.

Wiesemeyer says the U.S. and its allies need to watch for whether Russian President Vladimir Putin shuts Ukraine’s ports.

“That looks like that’s what he wants to do, which will throttle Ukraine commercially but will boost agriculture markets,” he says.

Wiesemeyer says he is watching China closely to see its decision during an upcoming vote in the United Nations National Security Council. “If they vote in favor of Russia, that’s one thing. Most people expect that. But if China abstains from voting, that tells you that they’re a little more cautious on this development than most people think right now,” he says.

To counter Putin, Wiesemeyer says President Joe Biden and U.S. allies will have to go after the financial system in Russia, called SWIFT, as they develop more sanctions against Moscow for its action in Ukraine.

SWIFT is a Belgium-based messaging network widely used by banks to send and receive money transfer orders or information. The organization is overseen by central banks in the United States, Japan and Europe.

“Germany is not in favor of (going after SWIFT) at this particular time, so NATO is not in agreement,” Wiesemeyer says. “Plus, you have to go after Putin’s own money around the world along with his key oligarch officials.”

A Reuters article says data from the Bank of International Settlements (BIS) shows that European lenders hold the lion’s share of the nearly $30 billion in foreign banks’ exposure to Russia.

Wiesemeyer says to keep an eye on the price of international crude oil, sometimes referred to as Brent Crude, because that has implications globally.

“If it goes close to $120 a ton, history shows that will lead into a world recession,” he says. “We don’t need that… it will increase inflation even higher.”

Wiesemeyer adds that while the U.S. government says the country has inflation of 7.5%, that’s “laughable.”

“In agriculture, it’s in the double-digit arena already,” he says.

BREAKING: Russian Invasion of Ukraine Sends Grain Markets Soaring

Jerry Gulke: 10 Thoughts on the Paradigm Shift in Global Agriculture

AgWeb Live: Analysis and Market Reaction to the Russian Invasion of Ukraine