Gasoline and diesel prices surged again Thursday, with energy analysts warning that multiple overseas conflicts have choked global refining capacity, and that relief is nowhere in sight.
The national average for a gallon of regular gasoline jumped seven cents overnight to $4.44, according to AAA. GasBuddy pegged the figure slightly higher at $4.46. Diesel, the fuel that moves every truck, train shipment, and piece of farm equipment in the country, hit a record $6.40 per gallon nationally. Patrick De Haan, a petroleum expert at GasBuddy, projected gasoline could reach $4.50 by the end of the week and diesel could climb to $6.60 as early as the weekend.
The numbers represent a punishing acceleration. Gasoline prices have risen nearly 50 percent since before the Iran war started in February. Diesel has climbed 77 cents a gallon since the beginning of September alone. And the forces pushing prices higher, war, sabotage, refinery outages, show no sign of easing.
Tom Kloza, chief energy adviser for Gulf Oil, put the situation bluntly. CBS News reported his assessment of the geopolitical picture:
"It's the two wars, which now look like the three."
Kloza was referring to the layered conflicts now battering global energy markets. The Russia-Ukraine war has already knocked an estimated three million barrels of refining capacity offline, by his count, as Ukrainian drone strikes have targeted Russian oil infrastructure. Russia banned diesel exports in July, removing a significant source of supply from the global market.
Iran-backed Houthi rebels have added a second front. Their attacks in the Red Sea slowed tanker traffic through the Strait of Hormuz, one of the world's most critical oil chokepoints. Earlier this week, the Associated Press reported that a Houthi strike on the East-West pipeline in Saudi Arabia, a key alternative route for oil exports, could keep that pipeline out of service for weeks, citing two regional officials. Eurasia Group, a global political risk research firm, estimated the pipeline attack alone cut four million barrels per day from the global market.
That combination, Russian refining losses, a diesel export ban, Houthi attacks on shipping lanes and pipeline infrastructure, and a broader slowdown in the Strait of Hormuz, has tightened supply at every stage of the chain. Brent crude sat at roughly $103 per barrel on Thursday.
Before the recent surge, gas prices had been falling as the Strait of Hormuz reopened and oil costs eased. That reprieve is now over.
Domestic trouble compounded the overseas squeeze. An ExxonMobil refinery outside Chicago suffered a power outage over the weekend and halted production for several hours. The disruption hit the Midwest especially hard. Illinois drivers were paying an average of $4.78 per gallon on Thursday, more than 30 cents above the national average.
De Haan pointed to the refinery situation as the core driver.
"It's all about refining capacity."
He explained the global dimension of the problem. Russia, before the war, exported a significant volume of diesel into the global supply chain. With its export ban in place since July and continued Ukrainian strikes degrading its infrastructure, Moscow's ability to contribute has shrunk steadily.
"Russia exports a significant amount of diesel to the global supply chain. Without that export, which Russia has banned since July, and with these continued attacks, it makes it less and less likely that Russia can meaningfully contribute."
The refining bottleneck is global, and the United States cannot insulate itself from it. Normal worldwide refining capacity runs at roughly 100 million barrels per day, Kloza noted. Between the Ukrainian strikes and the pipeline attack, millions of barrels of that capacity have vanished from the market in a matter of weeks.
Gasoline gets the attention because drivers see it every time they fill up. But diesel's record run carries broader economic consequences. Diesel powers the trucks that stock grocery shelves, the equipment that plants and harvests crops, and the heating systems that keep roughly four million Northeastern households warm through the winter.
Kloza warned that the diesel spike will ripple far beyond the fuel pump:
"Buckle up and recognize that inflation is likely to get turbocharged by these high prices for a product you probably don't care much about, which is diesel fuel."
He drove the point further:
"Everything that moves around the country and all crops are dependent on spending money on that fuel."
For Northeastern families who heat with oil, a product refined from diesel, the math is brutal. Kloza laid it out: prices in the $6 range mean a household burning 1,000 gallons over a winter faces a $6,000 heating bill. When diesel first crossed the $6 mark, analysts warned the cost would cascade through the broader economy. It has.
That inflationary pressure lands on top of an economy already under strain. The Federal Reserve has been raising interest rates to fight inflation, but rate hikes cannot drill oil wells or rebuild bombed-out pipelines. Energy-driven inflation is a supply problem, and the supply picture is getting worse, not better.
Not every state feels the pain equally. California, already home to the nation's highest fuel costs, saw diesel averaging $8.35 per gallon. Regular gasoline in the state topped $6. Limited in-state refining capacity and heavy regulatory costs have made California chronically vulnerable to supply disruptions.
Kloza noted the pattern extends beyond one state:
"Blue states tend to be more expensive. Red states tend to be cheaper, and that has a lot to do with where the energy is and where the refining is."
States with robust domestic energy production and refining infrastructure, overwhelmingly red states, have a built-in cushion. States that have restricted drilling, blocked pipelines, or layered on fuel taxes and environmental regulations pay more. The market does not care about ideology. It prices in capacity, and capacity is a policy choice.
President Trump has repeatedly pressed the energy industry to bring costs down. He told gas retailers to drop prices and warned of consequences if they failed to pass savings along to consumers. But when wars overseas destroy refining capacity and shut down pipelines, even aggressive domestic pressure can only do so much without new supply coming online.
De Haan's advice to American consumers was direct:
"Consumers should plan on higher prices for longer."
Kloza projected gasoline would hover between $4.25 and $4.50 per gallon, with the risk tilted to the upside. Some motorists have already started cutting back on driving in response, he noted, but reduced demand alone cannot offset the scale of the supply losses now hitting the market.
The geopolitical conflicts feeding the crisis show no signs of resolution. Ukrainian drone strikes on Russian refineries continue. Houthi rebels remain active in the Red Sea and have now demonstrated the ability to hit critical Saudi infrastructure. The East-West pipeline, one of the few alternatives for rerouting oil exports away from the contested Strait of Hormuz, may be offline for weeks. Each escalation tightens the same vise.
Earlier this year, falling gas prices had offered a brief window of relief as diplomatic efforts appeared to ease tensions. That window has closed. The current trajectory points in one direction: up.
Americans who work, drive, eat, and heat their homes are the ones absorbing the cost of a world on fire, and the people making energy policy in Washington owe them more than excuses.
