Diesel Prices and Crude Oil

What makes up the diesel price

According to the EIA, the average US retail diesel price of $3.66 a gallon in 2025 broke down as follows: crude oil 43.6%, refining costs and profits 19.2%, distribution and marketing 21.0% and taxes 16.2%. Over 2016–2025 the averages were 44.9%, 16.9%, 20.7% and 17.5%. The federal tax on diesel is 24.4 cents a gallon, six cents more than on gasoline, and state taxes and fees averaged 35.86 cents in January 2026. In the EU, excise duties and VAT are a much larger part of the price.

Refining takes a bigger share of the diesel price than of the gasoline price, and it is the component that has changed most in 2026.

The diesel crack spread

The diesel crack is the gap between the wholesale diesel price per barrel and crude. Using EIA spot prices for New York Harbor ULSD against Brent, it averaged $28.68 per barrel in 2025 and $34.15 in February 2026. After the Strait of Hormuz closed, it jumped to $62.98 in March and reached $93.99 in September 2026, far above the 2022 average of $55.31. In September, wholesale ULSD averaged $4.956 a gallon, of which about $2.72 was crude and $2.24 refining margin. See the crack spread guide for how refiners use it.

Five drivers of diesel prices

1. Crude oil

Each $10 per barrel change in crude moves the cost of diesel by about 24 cents a gallon. Brent's EIA spot average rose from $70.89 in February to $114.16 in September 2026, which alone adds about $1.03 a gallon.

2. Refinery capacity

Diesel comes from the distillate cut of the barrel, and refiners can raise its yield only a little. Reuters columnist Ron Bousso estimated in October 2026 that losses in Russia and the Middle East had cut global refining capacity by about 2 million barrels per day. The Middle East is also a large exporter of diesel and jet fuel to Europe, so the closure of Hormuz hit product supply directly.

3. Russian product sanctions

Russia was a major supplier of diesel to Europe before 2022. The EU banned imports of Russian refined products from 5 February 2023, with a G7 price cap of $100 per barrel on premium products such as diesel. Europe replaced Russian barrels with longer-haul supply from the US Gulf Coast, the Middle East and India, which made the Atlantic market more sensitive to any disruption. In October 2026 the US eased some sanctions to let about 15 million barrels of Russian diesel be exported over three months, around half of one day's global diesel use.

4. Freight and economic activity

Diesel powers trucks, trains, ships, farm machinery and construction equipment, so demand tracks industrial output and goods trade. Strong freight demand tightens the market, while a slowdown in manufacturing or trade eases it. High diesel prices feed directly into transport costs and food prices; see oil prices and inflation.

5. Inventories and seasons

Diesel competes with heating oil in winter and with farm demand at harvest. The EIA reported East Coast distillate stocks 32% below their five-year average in September 2026. Low stocks make prices jump on each new disruption.

Outlook

The EIA's October 2026 Short-Term Energy Outlook put the September average US retail diesel price at $6.29 a gallon. It forecasts an average of $5.19 for 2026 and about $4.49 for 2027, assuming Middle East flows recover gradually. These forecasts depend heavily on the course of the conflict. For crude price views, see the oil price forecast page.

Regional prices in the US

On 5 October 2026, diesel averaged $8.082 a gallon in California and $7.229 on the West Coast as a whole, $6.476 in New England and $5.819 on the Gulf Coast. California's prices reflect stricter fuel standards, higher taxes and limited pipeline links to other refining regions.