US diesel price tops $6.50 a gallon as global fuel crisis deepens

Tehran - BORNA - Data from the American Automobile Association showed the national average diesel price jumped to $6.5050 a gallon by Sunday. The increase — from the $6 level recorded only two weeks earlier — has been rapid, coming as benchmark Brent crude holds around $100 a barrel and fuel supplies from the Middle East and Russia remain severely constrained.

A month ago, the US national average stood at $5.5477 a gallon, meaning diesel has risen by a dollar per gallon in just four weeks. The price had already broken its 2022 record and crossed $6 a gallon for the first time in history.

Gasoline also climbing

Gasoline prices are rising in tandem with the crude surge and the tightening global fuel market. The national average now stands at $4.4761 a gallon, up from $4.1044 a month ago and $3.1894 at the same time last year.

The jump in diesel and gasoline prices could influence voter behavior in the US midterm elections in early November. A record diesel price may also worsen the inflation outlook and slow the country's economic growth.

Fed raises rates

Last week, the Federal Reserve raised its key interest rate for the first time since 2023. Fed Chair Kevin Warsh said: "The plain fact is that inflation is too high and has remained at this level for a long time."

The diesel surge has now become central to discussions about slowing economic growth and even the possibility of recession.

According to OilPrice, Goldman Sachs estimated a 30 percent probability of recession over the next 12 months in March, when the conflict in the Middle East began. However, the resilience of the global and US economies against supply disruptions over the past six months has since reduced that estimate to 15 percent.

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