Diesel will be first, likely soon.
National average gasoline and diesel price.
National Average Gasoline and Diesel Price, Weekly
Diesel: $5.45
Regular Gasoline: $3.92
Mid-Grade: $4.65
Premium: $5.02
National Average Gasoline Price, Weekly
National average gasoline price.
Daily AAA Price 2026-08-18
Diesel: $5.4677
Regular Gasoline: $4.0654
Mid-Grade: $4.5740
Premium: $4.9579
Record AAA Prices
Diesel: $5.8159 on 6/19/22
Regular Gasoline: $5.0165 on 6/14/22
Price to New High
Diesel: $0.3482
Regular Gasoline: $0.9512
Based off these numbers, diesel diesel crack spreads, and serious refining issues, diesel will hit a new record price much sooner.
Diesel Crack Spread Definition
The diesel crack spread is the pricing difference between a barrel of crude oil and the ultra-low sulfur diesel (ULSD) refined from it.
It represents the profit margin a refinery makes on producing diesel.
The term “crack” comes from cracking, the chemical refining process that uses heat and catalysts to break heavy, complex crude oil molecules into lighter, higher-value middle distillates like diesel and jet fuel.
Because diesel powers global commercial trucking, cargo ships, trains, and agricultural equipment, the diesel crack spread serves as a vital leading indicator for industrial economic activity, supply chain health, and looming transportation inflation.
Path to Record Highs
Crack Spread Divergence: Ultra-low sulfur diesel (ULSD) crack spreads are pricing in a severe structural premium due to global refining deficits, whereas gasoline cracks typically compress heading into autumn.
Asymmetrical Path to Records: Diesel needs to climb just 6.37% to break its all-time high ($0.3482), while regular gasoline must surge 23.40% ($0.9511) to breach its 2022 peak.
Inelastic Industrial Demand: Unlike gasoline, which sees a structural demand drop as the summer driving season ends, diesel demand intensifies through Q3 and Q4 due to agricultural harvesting, holiday freight shipping, and heating oil blending.
Refining Constraints: Global refining capacity remains highly constrained for distillates, leaving inventory levels with virtually zero buffer for unexpected refinery outages or further geopolitical disruptions.
Economic Hit to Farmers and Truckers
The surging diesel crack spread hits both sectors hard, but it attacks their business models differently.
For truckers, it is an immediate, floating operational cost passed through supply chains.
For farmers, it is a rigid, cyclical gamble that can wipe out an entire year’s profit margin.
Price of Diesel vs Price of Crude
August 4 to August 17 Price Change
Diesel: +$0.73
West Texas Intermediate: +$7.69
Yesterday, I noted US Diesel Crack Surpasses $100 a Barrel for the First Time, Farmers Suffer
With diesel inventories sitting at a 12% seasonal deficit right as the agricultural harvest begins, independent truckers and price-taking farmers are left to entirely absorb the blow of a $101.85 crack spread.
The downstream supply chain is broken, and the inflationary consequences are locked in.
US Diesel Exports
According to the U.S. Energy Information Administration (EIA), the United States is exporting an unprecedented 1.884 million barrels per day (b/d) of distillate fuel oil (primarily diesel).
This surge represents an absolute historical record high for U.S. distillate exports.
This aggressive pace of outgoing shipments is a key fundamental driver behind the explosive crack spreads and tightening domestic supplies.
Where Are Diesel Export Going?
The geopolitical landscape has entirely reshaped the destination mapping for U.S. refined barrels. Historically, Mexico and South America have been the primary takers of U.S. diesel. However, under the current market stress:
The European Shortfall: Following massive drone disruptions to Russian refineries and a strict Russian ban on its own diesel exports, European hubs face severe localized energy deficits.
The Transatlantic Arbitrage: The price premium in Europe has blown the transatlantic trade arbitrage wide open. This has effectively caused U.S. diesel exports heading to Europe to more than double, drawing heavy commercial volumes right off domestic docks to supply overseas buyers.
Trump Blames the Oil Companies
US Not Immune from Global Constraints
A $5 increase in WTI, or less, could easily result in a new record diesel price depending on global refining capacity constraints.
The US is not immune from global refining constraints despite Trump’s nonsensical claims otherwise.
Hey farmers, how does it feel? Ah, how does it feel.
Not a Small Price
Q: How does it feel?
A: Record low polls for Trump show the answer.
In yet another huge political gaffe, on August 14, Trump proclaimed “I’ll Never Apologize, You’re Just Paying a Tiny Bit More”
Tell that to independent truckers operating on razor-thin spot margins.
Tell that to America’s price-taking farmers locking in massive input costs ahead of a critical harvest.
It isn’t a “tiny little bit more”. It is an inflationary tax that will ripple through every consumer household in the country.
And the bond market is watching too.
For discussion, please see Rising Bond Yields Are a Warning to the US Treasury and the Fed
Comments
Log in or sign up to join the conversation.