Diesel and gasoline prices have reached record highs amid ongoing conflict in the Middle East, with diesel averaging $6.40 per gallon nationally and expected to climb further. The price surge is attributed to restricted global oil supplies from Iran's closure of the Strait of Hormuz, with experts warning of continued increases that could impact fuel-dependent sectors like transportation and food delivery.
U.S. gasoline and diesel prices surged Thursday amid geopolitical conflicts, with national average gasoline jumping to $4.44 per gallon and diesel hitting a record $6.40. Energy experts project further increases driven by reduced global refining capacity, ongoing wars in the Middle East and Eastern Europe, and attacks on critical oil infrastructure including Saudi Arabia's East-West pipeline.
The national average gasoline price climbed to $4.43 per gallon, up 16 cents weekly and over $1 from a year ago, as crude oil remains elevated around $100 per barrel amid Strait of Hormuz volatility. Gasoline demand and domestic supply both increased, while prices approach the 2026 high of $4.56 set in May. Regional variation is significant, with California's average at $6.08 versus Indiana's $3.92.
The Federal Reserve is expected to raise interest rates for the first time in three years, with a quarter-point increase anticipated to combat persistent inflation driven partly by elevated oil and gas prices. Fed Chairman Kevin Warsh has signaled the central bank's commitment to restoring price stability, with annual inflation at 3.4% and diesel fuel reaching record highs.
Costco raised its Kirkland Signature motor oil price to $58 and limited purchases to two boxes weekly, while also restricting Mobil 1 oil sales to five packs per membership at $44. The increases stem from Middle East tensions disrupting oil supplies, pushing Brent crude above $109 per barrel and gasoline prices to nearly $4.32 per gallon.
A new study by researchers at UC Santa Cruz and UC Santa Barbara finds that scrapping functioning gasoline vehicles and replacing them with electric vehicles reduces cumulative emissions by 44% for a typical SUV over 16 years, with 92% of modeled scenarios favoring early retirement. The manufacturing emissions of the replacement EV are typically recovered within three years through lower operating emissions, making the environmental case for early vehicle retirement considerably stronger than the "greenest car is already built" argument suggests.