Diesel futures traded sharply higher Tuesday as doubts grew about the likely impacts of the Trump administration’s latest efforts to lower prices.
U.S. diesel futures were up 5% at midday to their highest level in weeks.
In Europe, diesel futures rose about 3.8%, while gas futures reached levels not seen all year.
A rise in futures markets generally indicates that prices will rise in the coming days.
Already, the average price of diesel nationwide has increased by 70% since the United States and Israel attacked Iran on February 28. The price of unleaded gasoline increased by more than 45% during this period.
Crude oil prices, meanwhile, were mixed. Brent was trading around $106 per barrel, while U.S. crude oil was nearing $95 per barrel. These two key energy benchmarks are up about 70% year to date.
Gasoline and diesel prices are rising especially quickly in parts of the country where President Donald Trump and Republicans can least afford to anger voters as the November midterm elections approach.
“Absolutely staggering price increases for wholesale diesel today,” Gulf Oil advisor Tom Kloza wrote on X on Tuesday. “The U.S. diesel retail price record of $6.53/gal could be surpassed by midterms.”
“Up 18 cts/gal on the Gulf Coast and East Coast; but up 28 cts/gal in Southern California and 25-30 cts/gal in the Great Plains and Great Lakes,” he wrote.
Patrick De Haan, head of oil analysis at GasBuddy, wrote on X that “$6/gal diesel could be here to stay for now.”
“Truckers and farmers won’t see relief anytime soon,” he wrote.
The sharp rise in diesel futures came just days after Trump announced a controversial deal with Russian President Vladimir Putin to increase U.S. diesel supplies by purchasing previously authorized Russian reserves.
When Trump announced the deal, he said it would result in millions of additional tons of diesel for the world.
While that may seem like a lot, analysts have since crunched the numbers and determined that, at best, the diesel in question would account for less than two weeks of U.S. demand.
Tuesday’s higher diesel futures prices are evidence that the market “clearly doesn’t believe Russian oil is on the way,” Kloza said.
The deal with Putin also required the Trump administration to suspend long-standing sanctions on Russian energy purchases.
The sanctions were put in place after Russia’s invasion of Ukraine in 2022, and the decision to lift them until April sparked widespread backlash both at home and abroad.
Trump has also put pressure on his European allies to release more of their diesel reserves.
The president’s announcement on October 2 that Europe had given in to pressure and would ease pressure on fuel temporarily cooled fuel prices for a few days. But the lack of additional details on this release has gradually erased any price drop.
A subsequent statement from the International Energy Agency confirmed what traders suspected: Europe would not issue new diesel reserves, simply continuing to fulfill a commitment made in March as part of a multinational effort to limit rising fuel prices.
Trump also signed an executive order this month to ease restrictions on a red-tinted, off-road diesel formulation not subject to federal gasoline taxes.
But industry groups quickly warned truckers to avoid using “red dye” diesel without more information on how the taxes would work.
It was unclear Tuesday whether Trump’s red-dye diesel order had an impact on domestic prices or supply.
Gn bussni
