U.S. diesel stockpiles hit record seasonal low, prices surge above $5.60/gallon

U.S. distillate fuel oil inventories—primarily diesel—plummeted to 103.4 million barrels in the week ending August 21, marking the lowest seasonal level on record since the early 1980s, according to Energy Information Administration data released August 26. The decline reflects soaring demand ahead of peak heating and agricultural seasons, compounded by reduced refined fuel exports through the Strait of Hormuz and Russia’s diesel export ban amid Ukrainian drone strikes on its refineries. Moscow is considering extending the ban for another month, further tightening global supply. Retail diesel prices in the U.S. have already breached $5.60 per gallon—near the highest levels since the start of the U.S.-Iran conflict and just 20 cents shy of the 2022 all-time record. U.S. gasoline prices remain stubbornly above $4 per gallon. Refinery margins for diesel production have hit record highs, underscoring intense global demand for U.S.-sourced fuel, while exports have surged but still fail to offset lost supply. The convergence of seasonal demand spikes, geopolitical disruptions, and refining constraints threatens to drive prices even higher, risking broader energy-driven inflation.