Oil Prices Climb Toward $100 as Diesel Shortage Pushes US Fuel Costs to Record High

• Brent crude rose above $97, putting oil prices within reach of $100 per barrel
• A worsening diesel shortage pushed US fuel costs to a record $5.82 per gallon
• Low inventories could keep freight, farming and consumer prices elevated

Oil prices moved closer to $100 a barrel on Friday as fighting between the US and Iran revived fears over Middle East supplies. Brent crude oil traded above $96, but the sharper warning came from fuel markets. US diesel prices reached a record $5.82 a gallon while refining margins surged. For households, truckers, and farmers, the strain is no longer confined to crude.

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Diesel Shortage Worsens as Inventories Thin

Brent was trading at $95 a barrel after rising to a high of $97.45, putting it on course for a 7.6% weekly gain, while West Texas Intermediate reached $92.10, according to reports. WTI was headed for a 10.4% weekly rise.

The diesel shortage looks more severe than the move in crude suggests. The US diesel crack spread, a measure of the profit from turning crude into diesel, touched a record $108.02 a barrel. Retail diesel hit $5.820 a gallon, narrowly passing its June 2022 peak.

TradeStation strategist David Russell said,

“We’re entering a key period for diesel consumption with the lowest inventories on record for early September.”

US distillate stocks stood at 104.2 million barrels in the week ending August 28. East Coast supplies fell to a record-low 19.3 million barrels, even as refinery utilization reached 98%, its highest since 2018.

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Higher US Fuel Costs Bring Another Inflation Risk

Before the conflict, roughly 900,000 barrels a day of diesel passed through the Gulf, equal to about 10% of global seaborne trade. Russia has also restricted diesel exports after attacks on its refineries.

The EIA expects tight global product markets to support elevated refining margins through year-end. Diesel runs through freight, construction and agriculture, so rising US fuel costs can reach grocery shelves and delivery bills quickly.

Crude is under the spotlight, but diesel is setting the immediate cost. Even if oil prices pause below $100, thin inventories and disrupted trade routes could keep bills for businesses and consumers uncomfortably high.

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