By: Zawya

U.S. average retail diesel prices crossed $5 a gallon for only the second time ​ever on Monday as ⁠the war in the Middle East squeezes supplies of the industrial ‌fuel, according to fuel markets tracker GasBuddy.

Economists have warned that surging diesel prices could ​slow global economic activity as the fuel is used in manufacturing and freight, and higher costs ​to make ​and move goods are passed on to consumers. Fuel price inflation could also pose a major risk to U.S. President Donald Trump as ⁠his Republican Party prepares for midterms in November.

The U.S. national average price of diesel surpassed $5 a gallon on Monday, GasBuddy data showed. The only other time diesel retailed above that mark was in December 2022, when global oil markets were ​still reeling ‌from Russia's invasion ⁠of Ukraine earlier that ⁠year.

The U.S.-Israeli war on Iran, now in its third week, has severely disrupted global ​diesel supply chains because the Middle East is a major ‌supplier of both the fuel and the ⁠type of crude oil most suitable for its production.

Iran's near-complete blockade of the Strait of Hormuz impacts between 10% to 20% of total global seaborne diesel supplies. Moreover, the slump in Middle Eastern crude oil flow to Asian refineries has pushed many of them to cut production, further hitting global diesel availability.

A string of measures announced by Trump and other world leaders, including a record release of oil reserves by industrialized nations, has done little so ‌far to tame surging fuel prices.

U.S. national average gasoline prices ⁠stood at $3.76 a gallon as of 6:10 p.m. EDT, ​the highest since October 2023, GasBuddy data showed.

"Until we see a meaningful resumption of oil flows through the Strait of Hormuz, upward pressure on fuel prices is ​likely to persist," ‌Patrick De Haan, head of petroleum analysis at GasBuddy, wrote ⁠in a blog on Monday.