Benchmark diesel price is now highest since war began

The benchmark retail diesel price used for fuel surcharges has climbed to its highest point since the start of military operations against Iran in early March. According to FreightWaves, the latest weekly average published by the Department of Energy reached $5.652 per gallon on Tuesday. This figure surpasses the previous record set in early April and follows a period where ultra low sulfur diesel prices rose during twelve out of thirteen trading sessions.

While retail costs peaked, the commodity exchange saw a significant reversal early this week as futures prices for ultra low sulfur diesel dropped more than 22 cents. This downward shift coincided with remarks from U.S. Treasury Secretary Scott Bessent, who indicated the current administration would prioritize economic sanctions over further military engagement. These market dynamics highlight a divergence between diesel and gasoline, which has seen much flatter price movement over the last month.

Supply concerns continue to impact the market, driven by refinery disruptions in Russia and reduced output from Middle Eastern crude grades. There is also significant volatility in data regarding oil transit through the Strait of Hormuz. Vortexa economist David Wech noted that daily flow volumes vary greatly, stating that "on the average of the last month, we see six to seven million barrels per day" passing through the region.