President Trump came into office pledging to lower energy prices for Americans. Instead, he is presiding over a historic run-up in fuel prices.
Diesel prices hit an average $5.85 a gallon on Friday, according to OPIS, a Dow Jones company. It is a new record that surpasses the previous one from 2022, when Russia's invasion of Ukraine sent energy markets into a tailspin.
And Americans ready to hit the road for Labor Day weekend will do so fueled by the most expensive gasoline ever at this time of the year: about $4.15 a gallon-or nearly 95 cents more than last year.
The jump in diesel is especially worrisome because the fuel is the lifeblood of the American economy and the increase is set to filter into already high inflation. Trucks and trains rely on it to move goods across the country; farmers depend on it to plant crops. When prices jump, businesses pass on the cost to consumers, who then pay more at the supermarket.
Food giants J.M. Smucker and Campbell's recently said they were seeing higher logistics inflation. Democrats on the Congressional Joint Economic Committee said in July that farmers had spent $1.4 billion more on diesel alone during the planting season than they did last year.
"The U.S. is very tight," said William O'Neil, an analyst at S&P Global. "I don't think there's any way to avoid widespread price pressure from continuing."
The monthslong closure of the Strait of Hormuz has constricted crude flows to Asia, where giant refineries ordinarily transform it into fuel. Iranian strikes have damaged large plants in the Middle East, and Ukrainian drone attacks have shut down a number of refineries in Russia. The U.S. is exporting huge amounts of diesel to the rest of the world, which is pushing prices higher domestically.
The snarl-up is happening at perhaps the worst possible time. Farmers are gearing up for the harvest season, and large parts of the Northeast are less than a month away from burning heating oil to stay warm. Meanwhile, some refineries are shutting down production as they undergo seasonal maintenance, further reducing available supplies.
U.S. oil-and-gas executives have been warning for months that the country risked wrestling with higher fuel prices. But the White House largely saw the warnings as alarmist and pointed out that the industry had predicted U.S. oil prices could stay well above $100 a barrel because of the closure of the Strait of Hormuz. Instead, prices have oscillated between $80 and $90 a barrel, largely because Trump convinced jittery markets that the conflict was under control.
Short of a ban on diesel exports, analysts say there is little the Trump administration can do to stave off further price increases. Energy Secretary Chris Wright has publicly shot down the idea several times, but record prices are likely to rekindle a debate over potential curtailments.
A White House official said there is no plan to implement restrictions on oil-and-gas exports.
Adjusted for inflation, truckers aren't yet filling up at 2022 levels, but that is small consolation: Diesel prices have soared 56% since the war began and $2.14 a gallon from a year ago.
"The more money you spend on fuel, the less money you have on hand to pay bills and to profit at the end of the year," said Scott Litchfield, a truck driver in Boston.
The freight company he consults for runs eight medium-size trucks each burning 40 to 60 gallons a day, and Litchfield estimates that it currently pays an extra $480 to $640 a day on fuel. It is charging some customers more for its services.
At the root of the Trump administration's energy woes is the widening disconnect between oil and fuel prices. Crude prices have remained relatively low despite the global turbulence: The U.S. benchmark price currently is about $90 a barrel. Analysts point to a number of factors that have contained prices.
By contrast, refining complexes hit by missiles and drones, whether in the Middle East or in Russia, can't be easily replaced. Energy executives said recently that roughly 5 million barrels of the world's refining capacity was offline. Separately, the U.S. and Europe have shut down refineries in the past year. California alone has lost 17% of its refining capacity through closures, according to O'Neil.
Trump this week urged a gathering of refining executives to do more to bring down fuel prices-including building new refineries. But the companies are already maxing out runs at their plants to maximize profit, and they have no appetite for new multibillion-dollar projects.
The White House official said refiners voiced their desire to expand capacity, especially as Venezuelan crude begins flowing into the U.S.
Much of the world has turned to the U.S. for additional fuel supplies. During the four weeks leading up to Aug. 28, the U.S. was on average shipping 1.77 million barrels of diesel a day, according to the Energy Information Administration. That's about 31% higher compared with the same period last year.
In New England and the Lower Atlantic region, stocks last week fell to their lowest levels since the EIA started keeping track of this data in 1990. In California, stocks fell to 1.16 million barrels, down from 1.73 million barrels a year before, according to the California Energy Commission.
Meanwhile, some refineries are shutting down for maintenance, including the largest plant in Canada, which exports more than half of its fuel to the Northeast.
"Any supply disruption, you know, has a magnified impact because there's no cushion," said Andy Lipow, president of Lipow Oil Associates in Houston.
The higher fuel prices have started to affect some of the largest food producers in the country. Executives at J.M. Smucker recently told analysts that the company was experiencing higher-than-expected inflation, in part driven by freight. Campbell's executives said they foresaw logistics inflation to be around double digits in its fiscal year 2027.
Litchfield, the truck driver, said he was "not happy at all" about the Trump administration's decision-making. "There was no reason for us to go to war in Iran."
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