Why Diesel Costs More Now Than It Did in 2022.
Over the last year many countries have been experiencing high diesel and gas prices, which have led to an increased cost of living and uncertainty in transport costs. This rise was caused in two parts. Back in 2022, the Russian Federation decided to invade Ukraine, which caused a global economic crisis, as powers chose sides, and sanctions on trade cut the supply of diesel and crude oil significantly. Following this the years 2023 through 2025 were mainly attempts to lower the prices back down, though there were still a few events that stalled the recovery. The second major spike happened this year with the start of the US-Iranian conflict in the Middle East. The second major jump was caused not by trade sanctions, but by the closure of the Strait of Hormuz and war damage to Gulf refineries, which again cut the supply of diesel and crude leaving the region.
Most industries rely on diesel to power their trucks for transportation, or as a fuel source in some capacity. Because of this, if diesel prices increase, the cost of production and operation increase. This leads to higher prices for not only the companies, but also the consumers, as the cost hike is passed on to the end user. The increased cost of diesel has affected all industries, including transportation, agriculture, and manufacturing, and also has created worry, as it shows vulnerabilities in the supply chain.
Transportation is the industry that has been hit the hardest by the increased diesel prices. In the US, diesel prices were at $6.20 on October 5th of 2026, while one year earlier it was only $3.71[1], which means there has been a 67% increase in diesel prices over the last year alone. In Europe the EU average for 2026 to date (1.896 EUR/L to 11 October) is 22% above the 2025 average, and the weekly price set a record of 2.237 EUR/L on 27 September, above the 2022 peak of 2.033[2]. These large increases in prices affect consumers and businesses, as personal transportation and shipping are experiencing the price increases directly.
While the increase in price is only a few dollars, the sum adds up fast. As FleetRabbit calculated in June 2026, a $1.87 per gallon gap between the EIA’s December 2025 forecast and the March 2026 peak adds about $1.44 million a year to the fuel bill of a 50-truck fleet running 100,000 miles per truck at 6.5 mpg[3]; at the October price of $6.20 the gap is $2.70 and the extra cost about $2.1 million. Across Europe, Transport & Environment puts the additional road-diesel cost to the EU economy since the strikes on Iran at EUR 40 billion, about EUR 270 million a day[4]. The transport cost increase will have a domino effect that increases all manufacturing transportation, and increases food costs.
In addition, the agricultural industry will be hit hard by the price hikes. Depending on the crop, the fuel per acre cost has varied, but all have increased. US farmers are experiencing extra harvest costs of about $7.98/acre for corn, $14/acre for rice, and $18.23/acre for potatoes[5]. Eurostat’s agricultural input price index for the EU-27 (2020 = 100) peaked at 146.9 in 2022 and was still 132.0 in 2025, with the motor-fuels sub-index at 179.6 in 2022 and 149.9 in 2025. The 2026 shock is already visible in the quarterly series: 133.1 in Q1 2026 and 138.3 in Q2 2026[6]. This means that not only is it more expensive to bring the food to the store, but it is more expensive to grow and care for it, which feeds through to food prices: US farm-level food input prices were up 15.6% year on year in September and truck freight producer prices up 19%[7].
As mentioned before, there were two separate years that caused the higher prices, so both will be explained separately.
The first major hit was the war in Ukraine. Because of Russia’s aggressive actions the US and EU cut ties with Russia, pivoting away from its oil and sanctioning trade with the country. This meant less Russian exports of diesel and crude oil, limiting the supply that the western countries had to use. The timing of this was a crucial part of the issue. The world was just coming out of a pandemic and industries were just starting to start back up. Shipping, agriculture, and the manufacturing industries all started requesting large amounts of diesel, which generated a lot of demand for the strained supply.
At the same time, many refineries were operating at maximum capacity, and some were even switching over the refining jet fuel or experiencing labor strikes. This meant that alongside the loss of Russian supply to the western markets, there was no way for more to be made locally. The increased demand created a bottleneck that led to prices soaring. To replace the lost barrels, Europe pulled in more diesel from the Gulf, India and the United States, delivered by tanker, at a higher cost in freight and in the premium needed to attract cargoes.
Due to the sanctions and strained refining, the price of diesel peaked in June 2022 (EU average 2.033 EUR/L on 26 June) and eased through the second half of the year as crude fell back and refining margins normalized; the EU ban on Russian refined products from February 2023 was absorbed by rerouting, with Russian diesel going to Turkey, North Africa and Latin America and Gulf, Indian and US barrels replacing it in Europe. After the 2022 spike prices fell for three years but stayed above 2021: the EU average was 23% above the 2021 level in 2023, 18% above in 2024 and 14% above in 2025[2]. Later measures, among them the EU ban on Russian refined products in February 2023 and the 2025 sanctions packages, did not interrupt the decline.
The second major increase came from rising tension in the middle east.
On February 28th, 2026, the US and Israel led a joint military operation and bombed military installations, fuel sites, and around locations some Iranian military leaders were thought to be. This sparked the major conflict that is currently affecting fuel and diesel prices. There were three major events that happened since the start of the war that has caused the increase in the diesel prices.
First, inventories were thin. By the week ending 25 September 2026 US distillate stocks were 14% below their five-year average, and by 9 October they stood at 102.6 million barrels, a record seasonal low[8]. On top of that, refinery closures since 2025 (Grangemouth, Wesseling, Lindsey, LyondellBasell Houston, Phillips 66 Los Angeles and Valero Benicia, about 0.95 mb/d in all) had already removed capacity, so less diesel was being produced. This magnified the shortage, causing an initial jump in prices.
Next, the closure of the Strait of Hormuz was a massive blow to diesel and crude oil trade. In 2025 an average of 20 million barrels a day of crude and refined products passed through the Strait, around a quarter of the world’s seaborne oil trade[9]. For a while the strait was almost completely closed: by 11 March, flows of crude and products through it had fallen to less than 10% of pre-conflict levels[9]. This meant that Europe lost a major source of its imported diesel. The United States, by contrast, is a net exporter of about 1.4 mb/d of diesel and supplied roughly half of Europe’s diesel imports in August and September 2026, so the shock reached it through exports draining domestic stocks rather than through lost imports. People and businesses were demanding more and more diesel again, but with even less supply.
Finally, due to the conflict there was damage to multiple refineries. This caused major supply issues, as there were no refineries to make it, alongside the issues of getting it out of the region. The Strait has since partly reopened, but product flows have not recovered: about 2.2 mb/d of Middle East refining capacity was offline in August 2026, against roughly 0.4 mb/d a year earlier[10], the region’s product exports were 1.9 mb/d in September against 4.7 mb/d before the war[11], and its diesel exports to Europe fell to 110 kb/d in September, the lowest since February 2020[12]. It has gotten harder and more expensive to move the diesel out, and even if Europe and the US just ordered the crude oil, to refine it themselves, they would face the higher export cost, plus a higher refining cost than the one in the middle east.
The world was recovering from the shock of diesel prices caused by the Russian war by looking towards the Middle East, and now the conflict in the Middle East has flared up the same problems again. Refiniery capabilities are falling, transportation of the diesel is getting riskier and more expensive, all while demand for the diesel continues to increase. This all leads to higher prices not only of diesel, but also of all other goods, as their production costs increase.
In March of this year the member countries of the International Energy Agency agreed a collective release of 400 million barrels from their emergency stocks to counter the loss of supply. About 330 million barrels have been released so far; on 2 October the G7 called for the remaining 100 million barrels to be released over the next four months, with more than 20 million barrels of diesel front-loaded, and the IEA Governing Board confirmed this on 15 October[9][13]. While this is not going to miraculously reduce the costs, its effects should slow the rise in the prices, and alongside other actions taken by the countries, maybe even lower the prices a little bit.
Separately, the US has struck a deal with Russia. According to President Trump, it would open 4.8 million tons of Russian diesel to the American and Global market. This deal has faced criticism, as US Senators are arguing it goes against the 2022 Ending Importation of Russian Oil Act[14]. Others comment on how the first two shipments are rather small - being 300 000 tons now and another 500 000 tons in November - or that the grand total of 4.8 million is nowhere in writing on Russia’s end, questioning the validity of the statement, and the trustworthiness of Russia. Regardless of the political backlash it faces, the deal struggles to compensate for the high prices the US is facing, as 4.8 million is, according to CNBC, "less than two weeks of US demand"[15]. Therefore, this deal is not expected to lower long term diesel prices, rather maybe stabilize them for a month at most.
The EU has also released a “toolbox” communication, called AccelerateEU, which includes various measures they recommend countries take to ease the struggles of the higher costs of living. Some of these recommendations include income support, vouchers, and lower electricity excise for vulnerable households, and it coordinates oil stock releases[16]. In addition, the Commission’s Spring 2026 Forecast counted EUR 14.5 billion of budgetary measures adopted by member states to cushion the energy price shock, rising to EUR 38.6 billion if the measures run to the end of the year; the figure covers energy prices broadly and does not single out diesel, and Germany, Spain, Poland and France have adopted further rounds since, so it is now a floor[17].
Some EU countries have taken measures to try and combat the prices. France is offering support in paying for the diesel to farmers, fishing, and construction[18]. Spain has a tax cut on petrol and diesel[19]. Germany reinstated their tax cut on petrol and diesel purchasing[20]. Finally, Poland cut VAT on fuel from 23% to 8%, cut fuel excise to the EU minimum and set daily maximum prices, in three rounds between late March and the end of December 2026[21]. All these actions are in an attempt to help the people and businesses deal with the higher and rising prices of diesel.
Finally, the US has floated around a few ideas on how to combat the higher prices internally, but none have passed yet. Two of the ideas were an Export ban, which would halt diesel exports from the US in order to preserve the limited supply they have. The idea was dropped after the G7 consensus to release diesel from their stores. Instead, red-dyed off-road diesel was allowed on highways by executive order on 5 October[22]. The other idea was a fuel tax suspension, though a floor vote was declined[23]. Even though none of these ideas were officially passed, similar ideas, or replacement ideas have been enacted to try and achieve the same or similar outcomes.
Diesel prices have come off their late-September peaks, the EU average from 2.237 EUR/L on 27 September to 2.136 on 11 October and the US price from $6.53 on 21 September to $6.20 on 5 October, but they remain far above pre-crisis levels, and as long as the conflict in the Middle East continues there is little reason to expect them to return there. All these regulations and counter measures are not at a scale large enough to overturn the shortages caused by diesel from both Russia and the Middle east being stopped or limited. Europe and the US sanctioned the one, and the US-Israeli strikes on the other were answered with the closure of the Strait of Hormuz. What many are looking towards now is how this will change the supply chain. The world runs on diesel, but if diesel costs are too high, then everything slows down as companies can not afford the same levels of production, and consumers can not afford the higher costs of living. Some industries are more flexible, as they can reprice their products rapidly to compensate for the higher diesel prices, while others - like agriculture or construction - cannot. Some countries might be able to slow the price hikes through domestic refining of diesel, or by using their stored supply, but neither will entirely stop the issue as the global outage affects different countries in varying ways, so trade with other countries will change. There is also the lack of effective ways to stop the export of the domestically produced diesel. South Korea has vast refining capacities, but other countries might be willing to pay a lot more money than the domestic market, so companies would export the diesel, leaving the issue of the domestic shortage prevalent.
Can the issue with diesel prices be solved? The short answer is yes, but it will take time. If the conflict in the Middle East continues, and tensions between Russia and the West stay high, the main diesel pumps of the world will stay closed; however, countries could start to invest more in domestic refining of diesel, or find an alternative, cheaper, fuel source. Both options would allow countries to be more self-reliant, or at least pave the way for a new fuel pump region to be created, shifting away from the Middle East and Russia. If the world decides to continue relying on global trade and trust, another similar situation will probably happen, where conflicts cause outages and shortages, but in most cases it is economically better for specialization and opportunity cost to dictate production. There is no easy solution, because regardless of what countries decide to do, they cannot implement it immediately, so there will be about a 1 year buffer before prices could theoretically fall again.