Published on 6/24/2026
The average price of diesel in the United States fell to less than $5 per gallon for the first time since mid-March, an indication that some of the inflationary pressures associated with one of the most important types of fuel in transport and supply chains have receded after a breakthrough in the US-Iranian negotiations and the authorization to sell Iranian oil for 60 days.
The national average retail price for diesel was $4.98 per gallon on Wednesday, down from a peak of $5.69 last April, but still well above the $3.76 per gallon recorded on the eve of the US-Israel war on Iran.
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Diesel prices jumped at the beginning of the war, as the Strait of Hormuz is a pivotal corridor for shipping fuel produced in refineries in the Gulf region, and about a fifth of the world’s oil and gas passes through the Strait.
Diesel prices directly affect the costs of shipping, transportation, agriculture, construction, heating, and electricity generation. The US Energy Information Administration reports that diesel trucks and trains transport most of the goods people consume, and diesel is also used in agricultural and construction equipment and generators.
Biofuel
Bloomberg quoted the head of research at the “Sparta” information and analysis platform, Neil Crosby, as saying that the current decline represents “a gain for the White House from a narrow angle, that is, comparing prices now to their peak in the second quarter,” but he added that there is still a long way to go before returning to pre-war levels.
The decline in crude prices from their high levels during the war helped push diesel prices down, after an increase in tanker traffic through Hormuz, a temporary easing of some restrictions on Iranian oil, and progress in the US-Iranian peace talks.
The White House used several measures to contain energy costs, including a temporary suspension of the Jones Act, which restricts shipping between American ports on ships of American manufacture, ownership, and crew, in addition to withdrawals from the Strategic Petroleum Reserve.
Limited stocks
Despite the decline, the diesel market remains tight, with Bloomberg indicating that local inventories have fallen to their lowest seasonal levels in decades.
The Energy Information Administration has warned that declining inventories of distillates, which include diesel and heating oil, increase the risk of price spikes and volatility when supply disruptions occur.
The Energy Information Administration said in its previous forecasts that US diesel prices remained high, especially due to the scarcity of global supplies and US inventories remaining below the five-year average, expecting the average price of diesel to reach $4.80 per gallon in 2026.
