The war in Iran and the Russian-Ukrainian conflict disrupted the global market. Retail diesel prices in the US set a historical record, and inflationary pressure fueled by energy may increase further. The average retail price of this widely used fuel at gas stations across the US reached $5.85 per gallon on Thursday, according to the American Automobile Association. As the peak demand season approaches and global supply tensions continue to evolve, diesel prices have surpassed the historical high of June 2022. On the Middle East side, the US-Iran conflict disrupted energy transportation in the Strait of Hormuz. Total Energy CEO Patrick Puyana said in August that “not a single ship of refined oil products” had been shipped from this waterway. Meanwhile, Russia extended the ban on diesel exports until September after a series of attacks on Russian refineries by Ukrainian drones. The unprecedented rise in diesel prices will have multiple and profound effects. Diesel is known as the driving fuel of the global economy. Electricity generation, household heating, agricultural tractors, and construction machinery and equipment all rely on diesel. Higher oil prices not only put cost pressure on consumers, but also created political challenges for the White House, which is only two months away from the midterm elections. In addition, the continued rise in diesel prices may further hamper the Federal Reserve's anti-inflation efforts. Bank of America policymakers have mixed signals in recent weeks about whether interest rate hikes are needed, and the Federal Reserve's next interest rate meeting will be held in mid-September.

The war in Iran and the Russian-Ukrainian conflict disrupted the global market. Retail diesel prices in the US set a historical record, and inflationary pressure fueled by energy may increase further. The average retail price of this widely used fuel at gas stations across the US reached $5.85 per gallon on Thursday, according to the American Automobile Association. As the peak demand season approaches and global supply tensions continue to evolve, diesel prices have surpassed the historical high of June 2022. On the Middle East side, the US-Iran conflict disrupted energy transportation in the Strait of Hormuz. Total Energy CEO Patrick Puyana said in August that “not a single ship of refined oil products” had been shipped out of the waterway. Meanwhile, Russia extended the ban on diesel exports until September after a series of attacks on Russian refineries by Ukrainian drones. The unprecedented rise in diesel prices will have multiple and profound effects. Diesel is known as the driving fuel of the global economy. Electricity generation, household heating, agricultural tractors, and construction machinery and equipment all rely on diesel. Higher oil prices not only put cost pressure on consumers, but also created political challenges for the White House, which is only two months away from the midterm elections. In addition, the continued rise in diesel prices may further hamper the Federal Reserve's anti-inflation efforts. Bank of America policymakers have mixed signals in recent weeks about whether interest rate hikes are needed, and the Federal Reserve's next interest rate meeting will be held in mid-September.