Diesel Above $6 a Gallon Weighs on Farms, Freight and Washington’s Russia Policy

Diesel, the fuel behind most freight trucks, farm machinery and home heating oil, averaged close to $6.30 a gallon in October, CBS News reported, citing AAA. That is a little below the record of about $6.52 set on September 22, according to the Associated Press, citing AAA. In mid-September the price had risen by almost a dollar in a month, NPR reported.

The causes stretch from the Persian Gulf to Ukraine. Oil prices climbed after the war with Iran began in late February and shipping through the Strait of Hormuz was disrupted. Brent crude, the international benchmark, settled at $109.86 a barrel on Friday, up from roughly $72 before the war, according to the Associated Press. Diesel has risen even faster than crude because refining capacity is short worldwide, analysts told NPR, pointing to damaged refineries, depleted inventories and the war in Ukraine, both major sources of diesel supply.

The costs spread through the economy. A Pennsylvania farmer told NPR that some of his equipment burns 100 to 150 gallons a day at harvest, a cost he cannot pass on. Heating oil has also jumped ahead of winter, and airfares were up more than 23 percent from a year earlier, NPR reported. The Federal Reserve raised its benchmark rate on September 16, its first increase since July 2023, and NPR reported that concern about energy costs pushing up other prices was part of the reason.

Fuel prices are now shaping foreign policy. On Friday, President Donald Trump waived many of the tariffs and sanctions in a new law aimed at the largest buyers of Russian oil and gas, two days before they were to take effect, certifying to Congress that the move served the national interest. Bloomberg reported that the penalties had complicated his effort to bring down diesel prices before the midterm elections, and Fox Business noted that Republicans have urged him to lower costs before voters go to the polls.

The waiver followed a deal with Russian President Vladimir Putin under which Moscow agreed to release millions of tons of diesel into the world market, according to Fox Business and CBS News. The administration’s case is straightforward: more fuel on the global market should mean lower prices for American truckers, farmers and families.

Critics see a steep price for that relief. Ukrainian President Volodymyr Zelenskyy called the decision unfortunate, and a bipartisan group of senators had earlier described the diesel arrangement as a betrayal of Ukraine, CBS News reported. A Putin envoy, Kirill Dmitriev, welcomed the waiver as historic.

Relief may not come quickly either way. Aaron Brady of S&P Global Energy told NPR that high energy bills could persist into next year even if the Strait of Hormuz reopens, which he considered unlikely.