Impact of the U.S.-Israeli War on Diesel Prices and the Economy

Since the onset of the U.S.-Israeli war with Iran on February 28, 2026, diesel prices have surged significantly, rising approximately 54 percent, while gasoline prices have increased by about 38 percent. The Energy Information Administration forecasts that average diesel prices will peak at over $5.80 per gallon, compared to $4.30 for gasoline. The conflict has severely disrupted global oil supplies, particularly affecting diesel, which is crucial for the transportation and logistics sectors.

New York TimesMother Jones

The closure of the Strait of Hormuz by Iran, a critical passage for about 20 percent of the world's oil, has exacerbated the situation. With Persian Gulf countries reducing diesel exports, the market has faced a substantial shortage. Joe DeLaura, a global energy strategist at Rabobank, noted that the specific oil produced in the region is better suited for diesel and jet fuel, leading to a more pronounced price increase for diesel compared to gasoline.

New York TimesMother Jones

The rising diesel prices have significant implications for the U.S. economy. According to researchers at Brown University, the war has resulted in an additional $19 billion in fuel costs for consumers, with diesel alone accounting for $9.4 billion of that total. This increase translates to approximately $71 per U.S. household. The impact is felt across various sectors, including trucking, agriculture, and construction, as higher diesel costs are passed down to consumers through increased prices for goods.

Mother Jones

Patrick De Haan, head of petroleum analysis for GasBuddy, emphasized that diesel is more critical to the economy than gasoline, as it powers a broader range of industries. The demand for diesel is less elastic than gasoline, meaning that while consumers can reduce gasoline consumption, industries reliant on diesel have limited options to cut back.

Mother Jones

Critics argue that the ongoing conflict and resulting fuel price hikes disproportionately affect lower-income households and small businesses. The rising costs of essential goods and services due to increased transportation expenses raise concerns about inflation and economic stability. Some analysts suggest that the U.S. government's response to the conflict, including blockades and military actions, may further exacerbate the situation.

Mother Jones

In light of the escalating crisis, President Donald Trump announced a blockade on Iranian ports, which has contributed to rising oil prices. Despite a temporary ceasefire aimed at reopening the Strait of Hormuz, the situation remains precarious, with only a few ships managing to transit the area. Experts warn that even if the strait reopens, it could take months for the market to stabilize, and new challenges may arise, such as potential tanker fees imposed by Iran.

Mother Jones

As the conflict continues, analysts predict that the gap between diesel and gasoline prices may narrow as summer approaches, traditionally a period of higher gasoline demand. However, the long-term effects of the war on global oil markets and U.S. consumers remain uncertain, with potential for further disruptions in supply chains and economic repercussions.

Mother Jones

“Diesel is the fuel that powers the economy much more than gasoline does,” said Patrick De Haan, head of petroleum analysis for GasBuddy, an app that lets consumers track fuel prices.” — Patrick De Haan, Head of Petroleum Analysis, GasBuddy

Mother Jones

“Gasoline demand is more elastic, meaning as prices go up, Americans can simply reduce consumption to some degree,” — Patrick De Haan

Mother Jones

“you may see a little bit less of an increase in diesel as markets move up.” — Patrick De Haan

Mother Jones