War with Iran Drives Record Diesel and Oil Prices

The ongoing conflict with Iran has triggered a surge in energy and lubricant costs across the United States, with diesel fuel reaching national records of $6.53 per gallon. The price spike follows February attacks on Iran by the United States and Israel, which blocked the Strait of Hormuz, a corridor for 25% of global seaborne oil trade. In the central U.S., diesel prices have averaged $6.68 per gallon, while Arizona and Kentucky also reported all-time highs.

Agricultural sectors are facing severe economic strain as harvest begins. Farmers in Arizona and the central U.S. report that high fuel, fertilizer, and equipment costs are squeezing profit margins, leading some to reduce tillage or delay crop transport. In Iowa, these costs have become a central issue in the U.S. Senate race. Democratic candidate Josh Turek and Republican candidate Ashley Hinson have both proposed suspending the federal gas tax to provide relief, though they differ on the broader military strategy.

Beyond fuel, the conflict has disrupted the supply of Group III base oils used in synthetic lubricants due to damage at a Shell refinery in Qatar. This has forced retailers like Walmart and Costco to raise motor oil prices and implement purchase limits. Automotive companies have also adapted; Stellantis switched bulk oil supplies to a less optimal grade to ensure availability, while Valvoline raised service prices to offset rising costs.