Live News EARNINGS ARTICLE H impact Aug 19, 2026, 10:34 AM UTC

Iran war squeezes diesel supplies as U.S. crack spread jumps

Diesel refining margins surged to about $100/bbl on Tuesday after reaching $102/bbl on Monday,

Diesel refining margins have surged to unprecedented levels as the Iran war tightens global fuel supplies, raising concerns that elevated diesel costs could ripple through trucking, agriculture and the broader U.S. economy.

Diesel Crack Spread At $100 The Diesel Crack Spread, which indicates the profit margin that refineries make on refining diesel from Crude oil, surged to $102/bbl on Monday, before coming down to about $100/bbl on Tuesday..

The crack spread had never risen above $89/bbl before this week’s surge, as per the report.

Read Also: Trump Says US Has ‘Total Control’ of Strait of Hormuz, Iran’s PGSA Says Waterway Remains 'Blocked' Strong U.S. diesel exports are further tightening domestic supplies. by the Wall Street Journal.

Diesel is a crucial part of the global economy as it has wide-ranging applications in transportation, energy and more.

Analysts from Bank of America Corp (NYSE: BAC ), cited by the WSJ report, said that exports were “drawing down already tight U.S. inventories,” and that a “global competition for fuel” was pushing diesel cracks “back toward record seasonal highs.” Trucks used to transport goods mostly run on diesel, while diesel is also crucial for heating needs as winter months and colder temperatures get closer.

Diesel is also essential to run farming equipment like tractors and more as the fall harvest season looms.

Higher diesel prices could raise costs across agriculture and freight, potentially adding to food-price pressures.

Midterm Dilemma? The Financial Times, on Tuesday, reported that soaring diesel prices could also have impacts on the upcoming midterm elections in November, citing a recent poll it conducted that showed more than 50% of American voters were disapproving of President Donald Trump and his policies, citing high costs of groceries and fuel, among others.

Read Also: Analyst Says US Gas Prices Hit ‘Highest Ever Level’ This Late in Year: ‘Never Been Above…’ According to data from the American Automobile Association, the national average price of diesel on Wednesday was $5.5042/gallon, higher than Tuesday’s average price of $5.4677/gallon.

In California, diesel topped $7 on average, at $7.0066/gallon.

Energy Secretary Touts Higher Oil Output As prices soar, Trump’s Energy Secretary Chris Wright touted a U.S. oil production surge in Texas as a means to offset the supply crunch and the high fuel costs due to factors like the Strait of Hormuz’s closure, as well as the Russia-Ukraine conflict, among others.

Wright also blamed former President Joe Biden -era clean energy laws for being as responsible for high fuel costs in the U.S. as the Iran war.

Meanwhile, Trump recently rejected a ceasefire extension following the expiration of the 60-day ceasefire agreed in the Memorandum of Understanding (MoU).

However, as the President recently staked a claim over the Strait of Hormuz, Iran’s Security Chief Mohsen Rezaee pushed back against the idea, saying that it was not under the U.S.’s control.