A recent poll indicates that President Donald Trump's approval rating has fallen to 33%, marking the lowest point of his current term. Surging diesel prices are placing significant strain on the American economy, with retail prices hitting $5.47 per gallon as of the 18th, approaching the all-time high of $5.82 per gallon. Data also reveals that diesel costs have climbed 8% over the past month.
Meanwhile, the premium of diesel over crude oil, known as the "crack spread," has reached unprecedented levels recently, signaling that supply disruptions are intensifying. "This is already a crisis, a silent crisis," said Tom Kloza, chief energy advisor at Gulf Oil. "It's like a punch to the core of the economy. I believe this will have a considerable impact."
Kennedy School economist at Harvard University, Furman, told reporters that tensions in the Middle East and around the Strait of Hormuz indicate such pressures could rapidly spill over globally. He added that the macroeconomic outlook for economies like the US and Europe is increasingly shaped by a combination of resurgent inflationary pressures and geopolitical shocks.
Where things stand politically
The rise in fuel prices could exacerbate the political challenges facing the Trump administration, as voter dissatisfaction grows ahead of the November midterm elections. According to a Reuters/Ipsos poll released on the 17th, President Trump's approval rating has slipped to 33%, its lowest level of his term. The report attributes the sustained decline in approval to the prolonged conflict with Iran, as well as rising living costs driven by surging oil prices and inflation.
The survey also shows that approximately 80% of respondents—including 87% of Democrats and 71% of Republicans—believe the conflict with Iran "will persist for a considerable period." Only 16% think the standoff could conclude within a few weeks.
With diesel production currently near peak capacity, analysts warn that any additional disruptions from war, maintenance, or hurricanes could send prices soaring. "When the refining system is running at full capacity, every producer becomes critical," said Kevin Book, an analyst at ClearView Energy Partners. "Therefore, any outage—whether from conflict or an accident—could lead to severe supply tightness."
"Even the threat of a storm could make things very bad," Kloza suggested, noting that prices could reach staggering figures of five, six, or even seven dollars per gallon.
Henik Fung, senior analyst for the global energy team at Bloomberg Intelligence, recently noted that energy infrastructure—including crude production facilities, export ports, and Qatar's LNG plants—has suffered varying degrees of damage in this conflict. The repair timeline for these facilities remains unclear, and even under optimistic scenarios, full capacity restoration would take months. He added that upstream production can only resume after tankers complete round trips and release existing inventories. Overall, returning oil prices and the supply system to pre-conflict norms would require a minimum buffer period of three to six months.
American farmers feel the squeeze
On the 19th, the spread between diesel and US crude prices was about $100 per barrel, more than triple the average gap seen in 2025. Elevated fuel costs are putting immense pressure on American businesses. "Diesel is the lifeblood of the industrial economy; you can't simply shut it off," said Campbell.
The timing of fuel price hikes is particularly sensitive, as many households begin purchasing heating oil ahead of winter, retailers stock up for the holiday season, and farmers harvest their crops. "Farmers are highly vulnerable to rising diesel prices, and this comes on top of a significant surge in fertilizer costs, also caused by the Middle East conflict," said John Boyd, founder and president of a US farmers' association. "My tractor holds about 100 gallons of fuel, so filling it up really adds up."
The White House has taken steps to ease supply strains, including coordinating a record release from global strategic reserves. However, with midterms approaching and voter discontent mounting, analysts suggest the government might adopt more drastic measures, such as export restrictions—though a White House official insists no such plan is currently on the table.
As global diesel supplies tighten, American diesel has become a sought-after commodity for other economies. For instance, Europe is increasingly reliant on US diesel exports. Given lucrative overseas margins, US refiners are expanding foreign shipments: in the first week of August, US distillate exports—including diesel and heating oil—reached 1.9 million barrels per day. Buyers in Brazil and Turkey are now competing with Europe for diesel supplies.
Furman summarized that in the US, market attention has shifted from a weakening labor market to persistent inflation; in Europe, growth has slowed but remains relatively stable, with its outlook also affected by energy shocks.
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