Diesel hits highest since the Iran war on Hormuz freight and insurance costs
Diesel is the story for haulers this week. The benchmark price is now the highest since the Iran war began, and it is still climbing while gasoline looks set to ease. That split matters because your fuel surcharge tables reset off diesel, not gas, so the pass-through pressure on freight rates keeps building even as pump gas softens.
Why diesel keeps climbing
The war choked Middle Eastern oil supply and pushed benchmark crude higher. It also raised the cost of shipping barrels generally. India's crude import bill is the clearest read on that: freight on the key Ras Tanura route out of Saudi Arabia has quadrupled, and insurance on a single Strait of Hormuz voyage is at record highs. India buys from the nearest source it can, which is the Gulf, so it is eating both the higher crude price and the higher cost to ship it.
That cost stack does not stay in Asia. Higher benchmark crude and tighter distillate feed straight into US diesel, and the war premium is what is holding the benchmark at its highest since fighting started. Gasoline may get some relief. Diesel is not following it down.
What haulers are paying
For carriers and fuel haulers, the squeeze shows up in the surcharge. When diesel runs ahead of gas, the surcharge climbs faster than shippers expect, and the argument over who absorbs it gets sharper on every renewal. Haulers running dedicated lanes on fixed rates are the most exposed, because the surcharge formula lags the weekly move and you carry the gap until it catches up.
The Ukraine conflict is the other weight on distillate. It is keeping diesel bid across the Atlantic basin, which pulls on the same global pool US refiners sell into. Both wars are pressing on the same product your business runs on.
A catalyst note
Researchers published work in Nature on an acid-base bifunctional monolithic MOF catalyst for biodiesel production. It is a lab result, not a supply event, and it changes nothing for your surcharge this quarter. Worth filing only because cheaper biodiesel catalysis could ease blend economics years out if it scales.
What to watch
Whether gasoline's relief holds while diesel stays bid, and how wide that spread runs, because the wider it gets the harder your surcharge conversations get. Watch Hormuz freight and insurance rates for any sign the war premium is coming out of crude. If the strait stays calm, distillate could ease. Until then, price your lanes for diesel staying high.