Full Breakdown
Global Fuel Price Surge Amid U.S.–Iran Tensions and Refining Constraints
By Drooid · · How we work
Core Event: Sharp Rise in International and Domestic Fuel Prices
Iran announced a second increase in petrol prices since December, keeping the first 110 litres (29 gallons) at the existing rate but doubling the price for any consumption beyond that—from 50,000 to 100,000 rials per litre. At the same time, the United States is experiencing record-high diesel prices, with the national average reaching $5.94 per gallon, while regular gasoline sits at $4.22 per gallon. The surge in global crude, now above $100 per barrel, has prompted Kenya’s Energy and Petroleum Regulatory Authority (Energy and Petroleum Regulatory Authority’s (EPRA)) to prepare for a possible price review on September 14.
Background & Context
Iran’s subsidy regime has been strained by U.S. sanctions and a naval “siege” of Iranian ports, prompting officials to consider price adjustments to offset lost revenues. In the broader market, a combination of limited refining capacity, ongoing disruptions in the Middle East, and a Russian diesel export ban have tightened global product supplies. Iranian strikes and restricted traffic through the Strait of Hormuz, together with Ukrainian drone attacks on Russian refineries, have each removed roughly 2 million barrels per day of product from the market.
Data & Statistics
- Iran: price for the first 110 L unchanged; consumption above that now costs 100,000 rials per litre (double the previous 50,000 rials).
- United States (as of September 9): average regular gasoline $4.22 per gallon; diesel $5.94 per gallon, a year-over-year increase of roughly 60 percent.
- California: gasoline near $5.88 per gallon; diesel $7.87 per gallon, about $2 above the national average.
- Global crude: benchmark oil surpassed $100 per barrel (Sh12,943) for the first time since July, driven by renewed U.S.–Iran hostilities.
- Kenyan impact: higher international crude could raise local petrol, diesel and kerosene prices when EPRA’s September 14 review incorporates the new benchmark.
Official Statements & Responses
Iranian parliament speaker Mohammad Bagher Ghalibaf urged citizens to “manage” consumption, emphasizing that high usage also reflects industrial demand. Vitol CEO Russell Hardy warned that global fuel markets remain “very tight and inflexible” despite modest increases in Persian Gulf crude flows. U.S. Department of Homeland Security issued a broad Jones Act waiver on March 17, 2026, allowing foreign-flag vessels to transport energy products between U.S. ports; Energy Secretary Chris Wright said the waiver has helped lower fuel prices on the West Coast and East Coast.
Verbatim Quotes
- “If we consume it properly, we can manage with the amount of gasoline we produce in the country,” — Mohammad Bagher Ghalibaf
- “We’re still not running enough refining capacity to prevent those draws, and we keep eating into the surplus that exists around the world,” — Russell Hardy, vitol CEO
What's Next
- EPRA’s scheduled price review on September 14 will determine whether Kenya’s pump prices adjust to the latest crude rally.
- The Jones Act waiver, extended through mid-November, is set to expire; without renewal, regional price premiums could widen as winter demand rises.
- Analysts expect refining margins to stay elevated through the winter, keeping diesel and gasoline prices above recent peaks unless a significant increase in Middle-East product flows or a reduction in Russian export bans occurs.
