AYESHA RASCOE, HOST:
The war with Iran has brought the Strait of Hormuz, where a fifth of the world oil passes through, close to a standstill. For U.S. consumers, that means higher gas prices, and that includes diesel, the fuel that powers many of the industries that we rely on for food and transportation. To help us understand the implications, we turn to Patrick De Haan. He's the head of petroleum analysis for GasBuddy. Welcome to the program.
PATRICK DE HAAN: Thanks for having me.
RASCOE: So how important is diesel to our economy? Like, what are some of the industries most affected by these rising prices?
DE HAAN: Well, certainly, as you mentioned, diesel is the fuel that powers the U.S. economy, from construction to agriculture, from logistics and everything in between. It's really the fuel that gets the products to the market that you and I bring home on a daily basis. And we've seen diesel flourishing. In fact, looking at data this morning, 45 of the nation's 50 states are seeing average diesel prices up over a dollar a gallon in the last four weeks, with nearly half of them up even $1.30 or more.
RASCOE: Oh, wow. I mean, so the last time diesel prices were this high was in 2022, and that was after the Russian invasion of Ukraine. So what lessons did you take away from that price spike?
DE HAAN: Well, that was certainly a very rare spike induced by, as you mentioned, Russia's invasion of Ukraine, but at the same time, the U.S. economy reopening - really, the global economy reopening. And we saw a tremendous spike in demand as consumers started to consume more and get outside. This situation here in 2026 is much different, that this is completely focused on the supply side. Demand has been pretty consistent, but it's a major supply disruption. As you mentioned there, the Strait of Hormuz carrying about 20% of the daily flow of oil, and that's just insurmountable to overcome. That has certainly impacted hundreds of millions of barrels now, sending the price of oil up and trickling down to the gas pump, diesel prices and jet fuel being extremely impacted as well.
RASCOE: So, you know, back in 2022, how were consumer prices for things like food and transportation affected?
DE HAAN: Well, obviously, the 2022 situation induced a significant level of inflation as fuel prices skyrocketed. Russia, at the same time, was a major producer of agriculture, and that caused a lot of commodity - corn, wheat, soybean prices to go up as well. So this time around, it's more focused on the fuel aspect - oil, chemicals, petrochemicals all being blocked, fertilizers being blocked as well. And that's going to create the collateral damage, not only diesel prices going up, but a lot of the chemicals farmers need to get the food to market are also being impacted. And so this could start another swing back the other way. Inflation has been lessening in recent months, and this certainly could swing the pendulum back in the other direction.
RASCOE: The Trump administration has given a lot of mixed messages on when this war could end. If there continue to be transit issues with the Strait of Hormuz, to put it lightly, just how high could prices get?
DE HAAN: Well, we don't really know that. The market doesn't have a good answer, and some have thrown out estimates of 150 to $200 a barrel. But economics teaches us that oil will continue going up until demand falls down to the realistic amount that the market can supply, which right now is a gaping 20 million barrel a day hole. There are some countries in the Middle East now trying to make some sort of contingency plan - Saudi Arabia using its East-West pipeline - but all in all, oil prices could continue to rise well beyond a hundred dollars.
RASCOE: I mean, so if the Strait of Hormuz were to reopen to oil traffic, how quickly would the price of oil fall back down, and then how quickly would that translate at the pump?
DE HAAN: Well, oil could start to plummet if that happened in just a matter of 24 to 48 hours, and it likely would take a few days beyond that for consumers to start feeling relief. And it could, at this point, take at least a month or beyond that for consumers to see noticeable and full decreases at the pump, with decreases of maybe a penny or two a day.
RASCOE: That's Patrick De Haan, head of petroleum analysis for GasBuddy. Thank you so much for joining us.
DE HAAN: Thanks for having me. Transcript provided by NPR, Copyright NPR.
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