Diesel futures hit $4.62/g—highest since Iran strikes rattled global supply
ULSD October contract surges 4.85% in a single session as Middle East crude disruptions tighten inventories ahead of.
Ultra low sulfur diesel (ULSD) futures approached a post-war high on Tuesday as prices surged nearly 5% in a single trading session. The October contract on the CME commodity exchange reached $4.6243 per gallon at 11:50 a.m. EDT, an increase of 21.37 cents from the previous close. If settled at this level, it would mark the highest ULSD price since military action against Iran in late February, surpassing the current post-war record of $4.6084 per gallon set on March 20.
The September contract concluded trading on Monday, leaving October as the front-month benchmark. The rally occurred despite a slight decline in the weekly retail diesel price reported by the Department of Energy’s Energy Information Administration (DOE/EIA). The average retail price fell 5.3 cents to $5.5999 per gallon, effective Monday but published Tuesday, marking only the second drop in the past eight weeks. The previous post-war high for retail diesel, $5.562 per gallon, was set just a week earlier.
The recent price surge lacks a single catalyst, instead reflecting a combination of global supply pressures. Key factors include reduced Middle East crude supplies, which are particularly suited for diesel production, and Ukrainian attacks on Russian refineries and export facilities—both of which have heightened concerns over diesel availability. Additionally, tight global inventories ahead of winter, when diesel demand typically rises due to its similarity to heating oil, have further strained the market.
Drivers behind diesel’s sharp rise
ULSD futures had briefly dipped in late August, settling at $4.4948 per gallon on August 21 before dropping further on hopes of eased tensions in the Strait of Hormuz. However, those expectations proved short-lived, and prices rebounded sharply, climbing back near $4.50 per gallon by Friday before accelerating this week.
The gap between futures and retail prices, which often lag by days or weeks, suggests further increases at the pump. The AAA’s highest recorded retail diesel price, $5.689 per gallon on April 9, now stands just 5.65 cents above Tuesday’s average of $5.6325 per gallon. With futures trading above $4.62 per gallon, that record could be challenged in the coming days if current trends persist.
Sign up free to ask CAMAL AI for a summary, the key points or anything else about this story.
Related stories
CAMAL AI
Financial Ports Newsletter
The maritime economy, every morning
Ports, shipping and freight markets in one short email. Free.
