WASHINGTON, D.C. — Day after day, the Iran war is tightening the financial squeeze on American consumers through sharply higher energy prices, with the cumulative increase in U.S. gasoline and diesel spending reaching an estimated $100 billion since the conflict began in late February.

The national average price of diesel reached a record $5.97 per gallon last week, according to AAA, surpassing the previous high of about $5.81 set in June 2022, a few months after Russia’s invasion of Ukraine.

GasBuddy, another fuel-price tracking service, reported that its national diesel average crossed $6 per gallon for the first time on September 10.

According to Axios, an energy cost tracker developed by Brown University’s Watson School of International and Public Affairs shows that the bill facing American consumers continues to rise rapidly, adding approximately $1 million to the cumulative cost every two minutes.

The Brown University tracker estimates that the average American household has spent more than $760 in additional gasoline and diesel costs since the war against Iran began on February 28.

The Brown University tracker estimates that the average American household has spent more than $760 in additional gasoline and diesel costs since the war against Iran began on February 28.

Most of the added household expense has resulted from higher gasoline prices, which remain below the record levels reached during the summer of 2022.

Diesel prices, however, have risen more rapidly in recent days and reached unprecedented levels, prompting growing concerns that the energy crisis will spread through the transportation, freight and travel industries in the coming weeks.

The diesel crisis

President Trump has said Americans are prepared to endure higher energy costs to prevent Iran from obtaining a nuclear weapon. But rising fuel prices are affecting nearly every part of the U.S. economy at a time when inflation remains one of voters’ leading concerns.

Patrick De Haan, GasBuddy’s head of petroleum analysis, said the record increase in diesel prices is especially important to consumers because diesel powers much of the country’s industrial supply chain.

He described the fuel’s role through the economy’s “three T’s”: trains, tractors and trucks.

While most Americans interact with gasoline prices directly and frequently, diesel is a lifeline for the broader economy. It powers the equipment and vehicles used to transport merchandise, food and agricultural products from farms and factories to retail stores across the country.

While most Americans interact with gasoline prices directly and frequently, diesel is a lifeline for the broader economy.

De Haan said the increase in diesel prices would gradually “trickle down” through the economy as transportation and production costs are reflected in the prices of goods and services.

A gallon of diesel cost approximately $3.76 on the eve of the war against Iran. It has since risen by more than $2, reaching about $6 per gallon nationally.

Regular gasoline, meanwhile, is averaging more than $4 per gallon.

Those higher fuel expenses affect nearly everything consumers purchase.

Much of the country’s agricultural equipment runs on diesel, meaning higher fuel prices increase farming costs and could eventually push food prices higher.

When trucking companies pay more to fill their vehicles, those transportation expenses can also raise the prices of most consumer goods.

School districts are facing similar pressure as the new academic year begins. Diesel continues to power more than 87 percent of the U.S. school bus fleet, according to the Engine Technology Forum, placing additional strain on transportation budgets.

Americans are already dealing with persistent inflation.

The Consumer Price Index rose 3.4 percent during the 12 months ending in July, according to Bureau of Labor Statistics data released in August.

Energy costs have risen much more sharply, consuming a growing share of household budgets, particularly among lower-income families.

The pressure has also reached producers. U.S. wholesale energy prices increased sharply in August, with diesel costs rising 24.1 percent during the month, according to federal data.

How long will prices remain elevated?

The outlook for fuel prices remains uncertain because of questions surrounding oil supplies from the Middle East and the continuing war in Ukraine.

Ukrainian attacks on Russian energy facilities are also affecting global fuel markets, particularly the diesel market.

As the Iran war continues, estimates suggest that American consumers could face elevated fuel prices for longer than analysts expected when the conflict began. That could intensify economic and political pressure on the administration as the midterm elections approach.

Most petroleum products have become more expensive since the war disrupted supplies moving through the Strait of Hormuz. Diesel, however, appears particularly vulnerable because of a sharp reduction in available supply.

Some Asian refineries have restricted diesel exports to meet domestic demand, reducing the volume available in global markets.

Recent Ukrainian attacks on Russian oil refineries have also forced several facilities out of operation. Russia has consequently reduced its diesel exports and begun importing fuel from countries including India, Kazakhstan and Belarus.

Jet fuel is another factor contributing to the shortage.

Its price has also risen since the outbreak of the war, creating a financial incentive for refiners to prioritize its production.

Jaime Brito, vice president of refining and oil markets at Chemical Market Analytics by OPIS, a Dow Jones company, said U.S. refiners have attempted to take advantage of higher jet fuel prices by producing more of it.

That shift has reduced the volume of diesel produced at refineries and further tightened supplies available to the market.

Seasonal factors could keep diesel prices elevated for several more months.

Diesel demand typically rises during the fall harvest because it powers much of the country’s agricultural machinery. The Engine Technology Forum estimates that diesel powers about 75 percent of farm equipment.

Demand for heating oil will also increase as winter approaches.

Heating oil and diesel are chemically similar products, and refiners can produce either from the same part of a barrel of crude oil. When demand and prices rise for one, the cost of the other frequently rises as well.

Costs spread through the economy

The effects of record diesel prices will not be limited to motorists who drive diesel-powered vehicles.

Higher freight expenses could increase prices at supermarkets and retail stores, while agricultural producers face rising costs for operating tractors, harvesting equipment and other machinery.

A prolonged period of expensive diesel could therefore place pressure on multiple parts of the supply chain simultaneously — from farms and factories to warehouses, delivery companies and stores.

Airlines could also face higher fuel costs, potentially placing additional pressure on ticket prices.

Large shipping companies can impose fuel surcharges to recover some of their expenses, but small trucking companies and independent operators may have less ability to absorb or pass along the increases.

A prolonged period of expensive diesel could therefore place pressure on multiple parts of the supply chain simultaneously — from farms and factories to warehouses, delivery companies and stores.

With the Iran war continuing, traffic through the Strait of Hormuz disrupted and Russian refining capacity under pressure, there is no clear indication that relief will arrive soon for American consumers.