Diesel desperation is mounting globally
The state of the global diesel market is getting even more precarious as the Russia-Ukraine war and the Iran crisis squeeze supply from multiple angles.
Why it matters: Diesel prices ripple through economies here and abroad, affecting shipping costs, construction and plenty in between.
The average U.S. price is up 44 cents over the last month to $5.32 per gallon, compared to $3.71 a year ago, per AAA.
However, during the Iran crisis, it hasn't hit the all-time high of $5.82 per gallon that AAA recorded in mid-June of 2022.
Driving the news: A new S&P Global Energy analysis unpacks the ingredients behind the "big squeeze" in global refined product markets.
S&P estimates that refineries worldwide processed 7.5 million barrels per day less crude last month than the same period in 2025.
A separate International Energy Agency analysis out this morning also tracks an extremely steep drop in how much crude that refineries are processing.
Data: AAA; Chart: Ben Geman/Axios State of play: Renewed hostilities in the Strait of Hormuz are further restricting supply after a period of optimism about normalizing flows.
Middle East refineries are processing much less as capacity remains "physically impaired, logistically stranded, or operationally unable to restart with confidence," S&P states.
Russia's restrictions on diesel exports following Ukrainian drone strikes on refineries have removed another 10% of seaborne supplies from the market, and China's refinery activity remains "subdued." By the numbers: Diesel exports from Russia, the Middle East and Asia in July were 1.3 million barrels per day lower year-over-year, "equivalent to about 20% of global seaborne trade," IEA's monthly report this morning states.
"Diesel is the tightest market right now," Amrita Sen, founder of market intelligence firm Energy Aspects, tells Bloomberg TV.
Zoom in: In the U.S., the Energy Department's stats and analysis arm yesterday revised its diesel price estimates upward.
The Energy Information Administration sees retail prices averaging $4.85 per gallon in 2026, compared to $4.61 in last month's outlook.
It also slightly raised its 2027 forecast average to $4.07, up from $4.02.
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