US Energy Executives Predict Diesel Prices Will Stay Elevated for Over a Year

Key points

• The Dallas Fed survey of 100 oil and gas companies indicates that nearly half of respondents expect diesel prices to remain above 2025 levels for more than four quarters.
• US diesel prices reached a record high of $6.50 per gallon in September 2026, surpassing the previous peak from 2022.
• Supply constraints are driven by the Iran war and Ukrainian strikes on Russian refining facilities, which have disrupted global energy markets.
• President Trump is considering a diesel export ban to lower domestic prices, but analysts from Rystad Energy and Goldman Sachs warn this would raise gasoline and jet fuel costs.
• Texas Governor Greg Abbott declared a statewide disaster over diesel prices, allowing the use of dyed diesel on public roads and requesting EPA waivers for ultra-low sulphur requirements.
• The price surge is hitting farmers and small businesses, creating political pressure on the Republican Party ahead of the November midterm elections.

Background

In late September 2026, US diesel prices surged to record highs above $6.50 per gallon, prompting the Trump administration to consider a 90-day ban on exports. This decision was driven by political pressure from farm-state Republicans ahead of the midterm elections, despite warnings from energy officials and industry leaders that such a ban would backfire by reducing refining output and raising gasoline and jet fuel prices. The situation highlighted the broader economic impact of fuel-cost pressure on rural voters and the global energy market.

How outlets are covering it

The Financial Times highlights the long-term outlook from US oil and gas executives, emphasizing that diesel prices will not return to normal for over a year due to supply constraints from the Iran war and Ukrainian attacks on Russian refineries. NBC 7 San Diego focuses on the immediate impact on local farmers, noting that diesel prices in San Diego have reached $8.23 per gallon, a 65% increase from a year ago. The NBC report also mentions rising fertilizer costs and borrowing costs, which are further straining agricultural operations. The Financial Times notes that the Trump administration is considering a diesel export ban, while analysts warn this could raise gasoline prices and destabilize global markets. The NBC report does not mention the export ban but focuses on the local impact of rising fuel costs on farmers.

Why it matters

The prolonged elevation of diesel prices is having a significant impact on the US economy, particularly on farmers and small businesses. The political pressure on the Republican Party ahead of the midterm elections is intensifying, with the Trump administration considering a diesel export ban to lower domestic costs. However, analysts warn that this move could backfire by raising gasoline and jet fuel prices and destabilizing global markets. The situation highlights the broader economic impact of fuel-cost pressure on rural voters and the global energy market.

What to watch

The Trump administration is expected to make a decision on the diesel export ban in the coming weeks. If the ban is implemented, it could lower domestic diesel prices in the short term but raise gasoline and jet fuel prices over time. The situation is likely to intensify political pressure on the Republican Party ahead of the November midterm elections. The long-term outlook for diesel prices remains uncertain, with US oil and gas executives predicting that prices will not return to 2025 levels for more than four quarters.