Prices for diesel fuel jumped to a new high
over mounting fears that fighting in the Middle East could further threaten oil
supplies.
·
Oil
prices surge: Fears of further Middle East escalation
and disruption to energy supplies briefly pushed crude oil to $110/barrel on
Friday.
·
Brent
crude: The international benchmark surged before
easing to around $106/barrel.
·
WTI
crude: The U.S. benchmark was trading near $101/barrel.
·
Red
Sea threat widens: Reports that the Houthi
militia seized a critical port on the Red Sea have
added another threat to global shipping and energy supplies.
·
Strait
of Hormuz disruption: Iran has effectively blocked most
shipping through the Strait of Hormuz,
through which around 20% of global crude oil normally passes.
·
Limited
tanker movement: With assistance from the U.S. Navy, some
tankers have managed to transit Hormuz, but Iran has indicated it may tighten
its control over the waterway.
·
Bab
al-Mandab also affected: Iranian-backed Houthis
in Yemen have restricted tanker traffic through the Bab
al-Mandab Strait, another major oil-shipping route and an
alternative route used by Saudi Arabia.
·
Diesel
prices hit record pressure: U.S. average diesel
prices climbed to $6.06/gallon,
about 60% higher than
before the U.S.-Israel attack on Iran on 28
February.
·
Gasoline
prices: The U.S. national average reached $4.30/gallon, up 44%
since the war began.
·
Refineries
increase output: Refineries in the U.S.,
Europe, Africa and Asia are increasing
production of diesel, gasoline and other fuels to compensate for lost Middle
Eastern and Russian supplies.
·
Supply
still insufficient: Despite higher refinery production, energy
demand continues to exceed supply,
keeping fuel prices elevated.
·
Impact
on transport and agriculture: Higher diesel prices
are increasing operating costs for trucking
companies, farmers and businesses using heavy machinery.
·
Food
inflation risk: Fuel can account for up
to 30% of U.S. food costs, raising the risk that
sustained energy-price increases will eventually be passed on to consumers.
·
Heating
costs: U.S. households using heating oil are
becoming increasingly concerned about higher bills as winter approaches.
·
Cost
pass-through likely: Farmers and trucking companies have so
far absorbed much of the additional fuel cost, but a prolonged war could force
them to pass increasingly more of the increase to consumers.
·
Stock-market
reaction: Asian markets were mostly lower, with Japan’s
Nikkei 225 and South Korea’s KOSPI falling nearly 2%,
reflecting concerns among major energy-importing economies.
The
simultaneous disruption of Hormuz and Bab al-Mandab,
combined with attacks affecting Russian refinery capacity, is tightening global
fuel supplies. If the conflict persists, the resulting oil,
diesel and gasoline price shock could spread into transportation, agriculture,
food prices and broader inflation worldwide.
[ABS News Service/11.09.2026]
Mounting
fears in the markets that clashes in the Middle East could escalate and further
disrupt energy supplies briefly pushed the price of oil to $110 a barrel on Friday,
while U.S. diesel rose above $6 a gallon.
Concerns
over oil supplies, already heightened by the U.S. war against Iran, broadened this
week with reports that the Houthi militia had seized a critical port on the Red
Sea, presenting a new threat to shipping in the area.
The
price of Brent crude oil, the international benchmark, surged before easing to about
$106 a barrel, and West Texas Intermediate crude, the U.S. standard, was trading
at nearly $101 a barrel.
The
average price of a gallon of diesel fuel jumped to $6.06, according to the AAA motor
club, a 60 percent rise since the United States and Israel attacked Iran on Feb.
28. In response, Iran has effectively blocked most ships from passing through the
Strait of Hormuz, the narrow waterway between the Persian Gulf and the Gulf of Oman.
During normal times, about a fifth of the world’s crude oil flows through the strait.
With
assistance from the U.S. Navy, a few tankers have been able to get through, but
Iran has signaled in recent days that it was willing to
be more aggressive in exerting control over the strait.
U.S.,
European, African and Asian oil refineries have increased production of diesel,
gasoline and other fuels to make up for the loss of supplies from the Middle East
and Russia, where refineries have come under attack by Ukraine.
But
demand for energy is still outstripping supply. As a result, governments, businesses
and farmers are having to pay more for the diesel they need to run trucks, farm
machinery and other heavy equipment. And homeowners who use heating oil, which is
similar to diesel, are growing concerned about their monthly bills as winter nears.
Fuel
accounts for as much of 30 percent of food costs in the United States, said Kate
Gordon, a former senior adviser in the Department of Energy and now the chief executive
of California Forward, a nonprofit business group.
“So
far, farmers and trucking companies have been absorbing a lot of this cost increase,”
she said, “but with the war continuing on with no end in sight, they are going to
pass through more and more of the price jump to consumers.”
Oil remains elevated
·
The
price of Brent crude, which has been edging higher all week, was trading at about
$106 a barrel.
·
West
Texas Intermediate crude, the U.S. benchmark, was around $101 a barrel.
·
Investors
and analysts are focused on the continued disruption to shipping in the Strait of
Hormuz. The Iranian-backed Houthi militia in Yemen have also restricted tanker traffic
in the Bab al-Mandab Strait at the southern end of the Red Sea, which Saudi Arabia
has used as an alternative to the Strait of Hormuz.
Stocks are mixed
·
Futures
on the S&P 500 pointed to an increase when stocks resume trading in the United
States on Friday.
·
Stocks
in Asia, where countries import vast quantities of oil and gas, were mostly lower.
Japan’s Nikkei 225 and South Korea’s benchmark KOSPI fell nearly 2 percent.
Gasoline prices rise
·
The
national average for gas prices rose to $4.30 a gallon, according to AAA. The price
has risen 44 percent since the war began.
·
Gas
prices don’t move in lock step with crude, usually trailing increases or drops by
a few days.