Forget gasoline: This overlooked fuel could raise the price of nearly everything you buy
Diesel prices, which averaged $3.56 a gallon in January 2025, have climbed to $5.13 following the Iran conflict.
Lauren Simonetti on oil prices and public sentiment amid US-Iran conflict
Lauren Simonetti breaks down the impact of the US-Iran conflict on global shipping and oil prices, noting public frustration with escalating gas costs. She highlights how many Americans expect the conflict to last over a year.
The fuel most Americans never think about could become the Iran conflict's biggest economic consequence. While gasoline prices grab headlines, diesel quietly powers the trucks, farms, freight trains and heavy equipment that keep the U.S. economy moving.
From the groceries on supermarket shelves to the Amazon package on your doorstep and the materials used to build new homes, diesel is embedded in nearly every step of the supply chain. As prices rise, businesses face higher transportation costs that economists say often ripple through the economy, pushing up the cost of everyday goods.
Diesel prices, which averaged $3.56 a gallon in January 2025, have climbed to $5.13 following the Iran conflict, according to the U.S. Energy Information Administration.
A fully loaded semi-truck typically gets just 6 to 7 miles per gallon of diesel, according to Department of Energy data. Filling its roughly 250-gallon tanks can cost more than $1,280 at today's prices.
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"We all focus on gasoline because, ultimately, we're consumers and pump prices are very visible. But what we don't think about is the price of diesel, which is the workhorse fuel for the U.S. economy and especially for key sectors," Bernard Yaros, lead U.S. economist for Oxford Economics, told Fox News Digital.
"From an inflationary perspective, I'm very concerned about the recent rise in diesel prices as it pertains to the cost of food or grocery store prices," Yaros said.
"Take the food industry, for instance. Diesel powers the irrigation pumps, the tractors in the field and the trucks that bring food from the farm to your local grocery store. It's part of every layer of food production in the U.S."
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A person is seen grabbing the nozzle for diesel fuel at a gas station. (Rebecca Noble/Bloomberg/Getty Images / Getty Images)
An energy industry source, who requested anonymity because they were not authorized to speak publicly, said the recent diesel surge shows how geopolitical conflicts can quickly filter into the broader economy.
"The great majority of the price movement that you've seen in diesel markets over the last five months has been the direct result of the conflict in Iran and specifically the closure of the Strait of Hormuz," the source told Fox News Digital.
The Strait of Hormuz, a narrow waterway between Iran, Oman and the United Arab Emirates, is one of the world's most important energy chokepoints. Roughly 20 million barrels of oil pass through it each day, and disruptions can quickly tighten fuel supplies and drive diesel prices higher.
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A satellite image shows the Strait of Hormuz, a key maritime passage connecting the Persian Gulf to the Gulf of Oman, vital for global energy supply. (Amanda Macias/Fox News Digital / Getty Images)
Even if tensions in the Middle East ease, diesel prices may not quickly return to pre-conflict levels.
"Refineries don't process crude instantaneously," the source said. "A lot of times what you're filling up your car with today was refined a week and a half ago and was produced two months before that."
That lag means higher diesel costs can continue working their way through the economy even after crude oil prices stabilize, leaving consumers to pay more for groceries, deliveries and other everyday goods long after the headlines from the Middle East begin to fade.