US diesel prices hit record high, crossing $6.5 per gallon
What's the story
The United States is witnessing a major spike in diesel prices, with the average nationwide rate hitting $6.505 per gallon on Saturday, according to the American Automobile Association. This is the first time in history that diesel prices have crossed the $6.5 mark. The increase has been especially sharp in September, with prices rising by over 87 cents so far this month alone.
Supply issues
US-Iran war disrupts global diesel supply
The ongoing US-Iran war has disrupted global supplies of diesel, especially through the key Strait of Hormuz.
Crude oil shipments from the region have not returned to pre-war levels, affecting fuel production at refineries around the world.
Further complicating matters, Russia has banned most exports of diesel and may extend this curb through October due to continued Ukrainian drone strikes on its processors.
Economic impact
Impact on economy and elections
While most US drivers don't use diesel for their cars, the fuel is essential for trucks, agricultural equipment, power generators, boats, trains, and home-heating systems.
This means that the rising prices are affecting nearly every sector of the economy.
With midterm elections approaching, record diesel prices could hurt President Donald Trump's Republican Party in agricultural states like Iowa and those relying on home-heating oil such as Maine.