US diesel prices hit all-time high amid Iran conflict; Trump announces Venezuela oil deal
Diesel prices have surged to $5.85 per gallon as the US-Israel conflict with Iran disrupts global oil supplies, prompting the Trump administration to pursue a major Venezuelan oil development agreement.
What happened
US diesel prices reached an all-time high of $5.85 per gallon, up from $3.71 a year ago and exceeding the previous peak after Russia's invasion of Ukraine, according to the American Automobile Association. Fuel costs have climbed since the Iran conflict began in late February, driven by reduced oil supplies as Iran responded to the war by closing the Strait of Hormuz—through which one-fifth of world oil transits. In response, President Trump announced a Saturday agreement with Venezuela's interim leadership to develop 17 strategic oil fields with 65 billion barrels of proven potential. According to Interim Venezuela President Delcy Rodríguez, the deal involves an investment of more than $100 billion and more than $209 billion in taxes. A US official told CBS News the US government will retain 55% control of the joint venture. Regional disparities exist: western states face higher prices due to tax differences and distance from US oil producers, with Washington averaging $6.81 per gallon diesel compared to $5.03 a year ago. Petrol prices also reached historic highs at $4.15 per gallon, up from $3.20 a year ago.
Context
Diesel fuels commercial transportation—trucks, buses, trains, boats, farming and construction vehicles—making widespread price spikes consequential for supply chains and consumer goods costs. Rising fuel prices have generated political pressure ahead of November midterm elections, with Reuters/Ipsos polling showing Trump's approval at 33% and only 31% of Americans approving of the conflict. The Venezuela deal represents an attempt to increase US oil supply and reduce dependence on Middle Eastern sources disrupted by the Iran conflict. However, analysts have expressed skepticism about whether the agreement will overcome long-standing investment barriers in Venezuela's oil sector.