NEW DELHI: Global fuel prices have surged as a result of both the US-Israel war on Iran and Russia’s war on Ukraine.
Tehran has largely closed off the Strait of Hormuz, through which 20 per cent of the world’s oil and gas supplies had been shipped in peacetime, since the US and Israel first launched strikes on Iran in February.
The recent attack on Saudi Arabia’s East-West Pipeline, another key oil export route from the Gulf, as well as attacks by Yemen’s Houthis around the Red Sea and the Bab al-Mandeb strait have compounded supply disruptions.
Oil refineries and energy and port facilities have come under heavy attack in both Russia and Ukraine.
Global fuel inventories have plummeted, and diesel prices reached record highs in both the US and Europe in September, according to a report by Al Jajeera.
Last week, the Group of Seven countries agreed to release 100 million barrels of emergency reserves of diesel and crude oil after a US pressure campaign on the European Union in which the Trump administration threatened a US ban on its diesel exports.
Global fuel inventories have plummeted, and diesel prices reached record highs in both the US and Europe in September
Meanwhile, US President Donald Trump says he has agreed a deal to release stocks of diesel fuel from Russia to try to ease high fuel costs in the US before November’s midterm elections.
Trump announced on social media that after a “highly successful discussion” with Russian President Vladimir Putin, it had been agreed that Russia would “immediately” supply more than 300,000 tonnes of diesel fuel to the US and global marketplace.
Another 500,000 tonnes would be released in November, and a further 1 million tonnes sometime after that, Trump said. He added that, based on the current condition of its diesel refineries, Russia would then deliver another 3 million tonnes of diesel.
Trump claimed that this move, along with what he described as “total control” by the US of the Strait of Hormuz, would bring down diesel prices in the US and the rest of the world.
However analysts say that the deal will likely have little effect on easing the global energy crisis while European countries could refuse to buy from Russia altogether.
Pain at the pump
Surging diesel prices in the US saw the national average rise to a record $6.52 a gallon (3.79 litres) in September, more than twice the price from a year earlier.
The national average is currently $6.20, according to the American Automobile Association (AAA). In 2022 the US banned imports of Russian oil and gas under the Biden administration in response to the invasion of Ukraine in February that year.
A sweeping Russian sanctions law passed in Congress last month and signed by Trump also targets countries that buy Russian oil and gas. The Lindsey O Graham Sanctioning Russia and Iran Act of 2026 expanded existing sanctions and aimed to pressure Putin by targeting officials, banks and shadow tankers that facilitate the Russian energy trade.
The US is the world’s largest diesel exporter. Its inventories have fallen sharply since the Iran war began and remain below normal levels despite refiners increasing their output.
