Diesel prices push to new all-time high as oil prices jump after key Saudi pipeline shut

The price of oil jumped Monday after Saudi Arabia shut a critical pipeline and talks about the future of the Strait of Hormuz were postponed.

The international oil benchmark, Brent crude, rose as high as $108, while U.S. crude oil touched $103 per barrel.

Monday’s jump in prices came after the attacks on the East-West Pipeline, a key route for energy supplies that became even more critical due to the ongoing stalemate in the Strait of Hormuz, where vessel traffic has barely reached double digits in recent days.

Saudi Arabia’s energy ministry said Friday that “the pipeline was shut down as a precautionary measure.” It did not say when the pipeline would be operational again. The attacks came as the Iran-backed Houthi rebels in Yemen made sweeping gains that tightened their grip on the Bab el-Mandeb Strait, another critical waterway.

Adding to investors’ worries, a meeting between Iran and Gulf countries regarding Hormuz was postponed on Sunday afternoon. That meeting, set for Monday, was delayed “in the interests of consensus,” Oman’s foreign minister wrote on X.

Tehran said the meeting was postponed at the request of Riyadh.

Traffic through Hormuz remain at just a fraction of pre-Iran war levels. On Sunday, just 14 vessels passed through the strait, and that number was only 12 on Saturday, 11 on Friday, and nine on Thursday, according to data from MarineTraffic.

With crude oil prices rising as a result of those disruptions, so did gasoline prices. On Monday, the national average price of unleaded regular gas rose to $4.31 per gallon, according to AAA.

The national average price of regular gas has risen more than 45% since the war with Iran started. The price of U.S. crude oil has soared more than 50% since the war started on Feb. 28.

On top of that, the price of diesel fuel continues to set new all-time highs. The national average price of diesel rose to $6.23 per gallon on Monday, AAA also reported.

That commercial fuel, which is used in everything from trucking to boat transportation to trains, has become a particular focus for economists who say it could cause almost “everything” to cost more.

“The cost of diesel gets into just about everything,” KPMG chief economist Diane Swonk said in a recent interview with NBC News.

“From running a farm … [to the] cost of food, but also everything across the economy that’s shipped,” she said. When diesel prices rise, everything “gets that extra fee tacked onto it.”

Swonk predicted that the high cost of diesel will be an “inflationary problem” for months to come.

On Sunday, President Donald Trump sought to act on the issue by urging Ukraine to halt attacks on Russian energy targets.

Speaking to reporters during an appearance at the Irish Open in Doonberg, Ireland, Trump said he recently spoke to Ukrainian President Volodymyr Zelenskyy and asked him to stop targeting Russia’s oil refining infrastructure, particularly due to what is happening with the soaring price of diesel fuel.

“Mr. Zelenskyy has to do one thing,” Trump said, “he has to stop knocking out diesel fuel in Russia.”

“Let him go after targets, but not diesel fuel, because he’s causing a shortage of diesel fuel,” the president continued. “Don’t hit diesel fuel because that’s hurting the world.”

“The growing scale and intensity of Ukrainian attacks on Russian refineries this year have pushed Moscow to ban diesel exports,” ING commodities analysts noted Monday. “This has only tightened global markets, following Persian Gulf disruptions.”

Russia’s ban on diesel exports is set to expire at the end of September, but “clearly, there is the potential for further extensions,” ING’s team said.

After falling to as low as $4.77 per gallon in late June, new escalations between Ukraine and Russia have driven diesel prices 30% higher.

Since the start of the year, diesel prices have soared 75%.