Industry analyst Wood Mackenzie’s data shows 15% of global oil demand and 20% of global LNG supply typically pass through the Strait of Hormuz. (Bill Foley/Associated Press)
March 5, 2026 5:57 PM, EST
Key Takeaways:
- Diesel prices jumped nationwide after U.S.-Israel strikes on Iran and subsequent regional retaliation.
- Distillate markets tightened as shipping risk in the Strait of Hormuz disrupted global oil flows.
- Carriers face rising operational costs as fuel surges outpace surcharge adjustments.
Diesel prices were sent skyward in the immediate aftermath of the joint U.S.-Israel attacks on Iran, and the military escalation that followed set in motion a wave of geopolitical uncertainty that portends long-term energy uncertainty, market observers said.
Contract carriers were already feeling the pinch as weekly fuel surcharge adjustments lag increases in pump prices, and spot freight carriers were feeling sharp pain as their operating expenses surged.
The average on-highway diesel price in the United States reached $3.897/gallon March 2, according to weekly Energy Information Administration data. The nationwide average rose 8.8 cents week on week and increased 18.6 cents over the prior two weeks. The average price was 26.2 cents higher than the same week in 2025, the data shows.
Fuel costs were expected to be one area in which margins for fleets and owner-operators would not be squeezed further in 2026. That’s not proving to be the case as global oil and therefore petroleum product markets such as diesel, gasoline and jet fuel strengthen as geopolitical tensions escalate.
The latest stimulus for higher prices followed the launch by the Trump administration and Israel of air strikes on Iran on Feb. 28, killing the country’s leader — Ayatollah Ali Khamenei — and many of his closest aides and allies.
Iran launched missiles of its own at Israel and Gulf states, as well as shutting down the Strait of Hormuz with threats to sink any crude, liquefied natural gas or refined product tankers sailing through the narrow passageway. Wood Mackenzie figures show 15% of global oil demand and 20% of global LNG supply typically transit the waterway.
“The war between the U.S. and Israel against Iran is sending shock waves through the oil market —and has the potential to be the largest oil supply disruption in history if oil flows via the narrow Strait of Hormuz remain low or come to a halt,” Jim Burkhard, S&P global vice president of oil markets, energy and mobility, said March 2.
Interconnected Markets
Diesel markets are more globally interconnected and highly sensitive to shipping risk and maritime disruption than even crude oil, GasBuddy Head of Petroleum Analysis Patrick De Haan said March 3. With elevated tension in the key global shipping corridor, diesel is reacting more aggressively than gasoline, he explained.
Crude and gasoline prices are likely to sag first, according to De Haan, with diesel prices likely to continue to rise into the week starting March 9 due to the tighter supply conditions and strong demand for distillate petroleum products.
On a region-by-region basis, the largest week-over-week diesel fuel increases per EIA March 2 data were in New England, the Gulf Coast and the Lower Atlantic. The latter region comprises the states of Florida, Georgia, North Carolina, South Carolina, Virginia and West Virginia.
Iowa Showed Highest Increase
Fleet managers and owner-operators in Iowa saw the biggest increase in diesel prices at 39 cents a gallon, data released March 4 by GasBuddy shows. Iowa was followed by Nebraska and Arkansas at the top of the standings, but another five states also saw average prices jump more than 30 cents, according to GasBuddy.
The metropolitan areas with the largest price hikes show a similarly wide geographical spread. Hilton Head-Bluffton, S.C. topped the standings at 75.5 cents, GasBuddy data shows, followed by Ames, Iowa; Rock Hill, S.C.; West Memphis, Ark.; and Greenville, N.C.
Diesel prices are rising faster than gasoline prices, both nationally and globally, with diesel markets tighter than their gasoline peers, according to De Haan.
Veteran market observer Tom Kloza on March 3 told Transport Topics that wholesale market price increases had to fully reach retail markets and the truck stop.
“This price surge is reminiscent of spring 2022 when diesel relentlessly climbed to all-time highs. Thankfully, I don’t think we’ll get anywhere near the 2022 highs, but we will cross $4/gal as a national average in short order. Diesel along with jet fuel will soon command significant cost increases to last year,” Kloza said in an email.
“It’s hard to tell if we are in the second inning or the middle of the game as far as the global surges go,” Kloza added. “Prices have skyrocketed, but trading is pretty orderly. The greatest worry is that the war will see Iran lash out at petroleum infrastructure in the Persian Gulf and perhaps elsewhere.”
“This price surge is reminiscent of spring 2022 when diesel relentlessly climbed to all-time highs. (Matthew Hatcher/Bloomberg News)
North America’s benchmark WTI crude futures contract was trading above $75 a barrel March 4, having reached an intraday high above $77 and ended the Feb. 27 trading session around $67.
Fellow benchmark Brent crude was trading above $78 per barrel as March 4 trading ended, having ended Feb. 27 around $72.50. The front-month Brent futures price saw peaks above $81 on March 2, which also saw the largest single-day gasoline price increase since March 4, 2022.
Crude to Reach $100 a Barrel?
Crude prices could exceed $100 a barrel if tanker flows through the Strait of Hormuz are not quickly restored, according to Wood Mackenzie.
U.S. Secretary of State Marco Rubio said late March 2 that the federal government would roll out a phased plan to counter the spike in crude and therefore diesel prices.
President Donald Trump on March 3 ordered the U.S. International Development Finance Corp. to provide political risk insurance and financial guarantees for maritime trade in the region, noting that the U.S. Navy could escort tankers through the region if necessary.
President Donald J. Trump on action to help keep down oil prices. pic.twitter.com/4Efv6BUXWZ
— The White House (@WhiteHouse) March 5, 2026
“No matter what, the United States will ensure the free flow of energy to the world,” Trump said in a Truth Social post, adding that more actions are coming.
How quickly the energy markets calm will be especially important to owner-operator costs and margins, according to DAT Freight & Analytics Principal Industry Analyst Dean Croke. Fuel typically accounts for 32% of operating expenses, he told TT in an email.
