Diesel prices rose during the Iran war, raising the cost of groceries, new homes
Lauren Simonetti breaks down the impact of the US-Iran conflict on global shipping and oil prices, noting public frustration over rising gas costs. He highlights how many Americans expect the conflict to continue for a year.
Fuel that most Americans don't think about could be the biggest economic impact of Iran. While gasoline prices make headlines, diesel quietly powers the trucks, farms, freight trains and heavy machinery that keep the US economy moving.
From grocery stores on supermarket shelves to Amazon packages at your door and building materials used to build new homes, diesel is embedded in almost every step of the purchasing process. As prices rise, businesses face higher transportation costs that economists say are often detrimental to the economy, raising the cost of everyday goods.
Diesel prices, estimated at $3.56 a liter in January 2025, have risen to $5.13 following the Iran conflict, according to the US Energy Information Administration.
A fully loaded semi-truck typically gets only 6 to 7 miles per gallon of diesel, according to Department of Energy data. Filling its approximately 250-gallon tanks would cost more than $1,280 in today's prices.
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“We all focus on fuel because, in the end, we are consumers and the prices at the pump are very visible. But what we don't think about is the price of diesel, which is the fuel horse fuel in the US economy and especially in the key sectors,” Bernard Yaros, who leads the US economy of Oxford Economics, told Fox News Digital.
“Looking at inflation, I'm as concerned about the recent increase in diesel as it is about the cost of food or grocery stores,” Yaros said.
“Take the food industry, for example. Diesel powers irrigation pumps, field tractors and trucks that deliver food from the farm to your local grocery store. It's part of every layer of food production in the US.”
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Someone is seen taking a hose to pump out diesel at a gas station. (Photos by Rebecca Noble/Bloomberg/Getty/Getty)
An energy industry source, who asked not to be identified because they are not authorized to speak publicly, said the recent diesel surge shows how quickly a country's conflicts can spill over into the wider economy.
“Most of the price movement you've seen in the diesel market over the past five months has been a direct result of the conflict in Iran and particularly the closure of the Strait of Hormuz,” a 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 sinks. About 20 million barrels of oil are lost each day, and disruptions can quickly tighten fuel supplies and drive up diesel prices.
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The satellite image shows the Strait of Hormuz, an important sea route connecting the Persian Gulf and the Gulf of Oman, which is important for the world's 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.
“Refining companies don't disappear overnight,” said the source. “A lot of times this is what you fill your car with so today was refined a week and a half ago and produced two months before that.”
That decline means higher diesel costs could continue to weigh on the economy even after crude oil prices stabilize, leaving consumers paying more for purchases, deliveries and other daily goods after headlines from the Middle East begin to fade.
