Patrick De Haan has been tracking fuel prices for GasBuddy since 2011. He has worked through refinery fires, hurricanes, COVID and the 2022 diesel spike, and he is the guy reporters call when pump prices start going crazy and they need somebody to explain what is actually happening.
This week he pulled up the diesel spot market and posted a meme that said MOTHER OF GOD. Then he said he was speechless.
After that, he got specific. De Haan warned on X that $7 a gallon diesel is now a real possibility in the days ahead, and he named where it hits first: Michigan, Indiana, Ohio and Illinois, with Wisconsin a little better off because of lower fuel taxes. That is the industrial and farming heart of the country, in the middle of harvest, a few weeks before heating season starts pulling on the same fuel supply.
The exact date diesel hits $7 matters less than what the warning tells you about timing. Spot prices are what traders pay today. Wholesale prices follow within a day or two, and the sign at your local truck stop follows that. When the most quoted fuel analyst in the country says the spot market just broke, he is describing what retail prices look like next week, and that gap is the window you have to act before the rest of the country notices.
We warned Friday that the attack on Saudi Arabia’s East-West pipeline could make the fuel crisis a lot worse. In the four days since, just about everything that could go wrong has.
Diesel Set Another Record Monday and the Midwest Is Next in Line
AAA put the national average for diesel at $6.23 a gallon on Monday, according to The Hill. A year ago it was just under $3.70.
That is a 68 percent jump in twelve months. If your farm, business or pickup burned 1,000 gallons of diesel last year, you spent about $3,700. The same 1,000 gallons now costs about $6,230, which means $2,500 gone for the same work and the same miles. At $7, that bill hits $7,000, nearly double what it was a year ago.
California is already past the line the Midwest is worried about. CNBC reported diesel averaging $7.98 there, and De Haan has since posted that California crossed $8 for the first time. De Haan also told CNBC that Americans are spending about $700 million more per day on gasoline and diesel than a year ago, and he called diesel at these levels a “silent killer” for the economy.
Why this matters to you: even if you drive a gas car and have never owned a diesel in your life, you are paying for this. California grows about a third of the country’s vegetables and two thirds of its fruit, and every crate of it rides a diesel truck to your store. Construction equipment, garbage trucks, school buses, freight trains and the tractors that plant your food all burn it. Fuel inflation moves slowly through that chain, so today’s diesel spike can keep pushing up grocery prices, delivery fees and repair bills for months after the headlines fade.
The Trucker Gets the Bill First, and You Get It Last
Robert Bujdoso runs operations for Diversified Logistic Solutions in Girard, Ohio, a 14-truck company hauling cooking oil, corn oil and chicken fat. He told WYTV that checking diesel prices is the first thing he does every morning, and the fuel bill shows up every Thursday.
“I just about like to chuck a brick when you see it,” Bujdoso said.
His trucks carry 300-gallon tanks, so a single fill-up already runs close to $2,000. Last year that same tank cost about $1,100. Spread that across 14 trucks filling up again and again all month, and a small Ohio company is hunting for tens of thousands of dollars it did not have to find a year ago. The company has already added a fuel surcharge, because there is nowhere else for the money to come from.
Follow that surcharge down the line. The processor who buys the corn oil pays more and raises its price. The food company that uses the oil raises its price. The grocery store pays more to get the finished product delivered and passes as much of that as it can to the person at the register. Truckers do not cause diesel inflation. They just get the invoice first.
Why this matters to you: if diesel stays above $6 or climbs toward $7 in major freight corridors, fuel surcharges are going to get more aggressive, and products will cost more even when nothing about making them changed. The things hit hardest are heavy, bulky and shipped long distances: canned goods, bottled water, animal feed, lumber, auto parts and generators. Those are also the things people suddenly need after a storm or breakdown, which is why it makes sense to buy them before the surcharges show up on the shelf.
Farmers Are Buying Record Fuel in the Middle of Harvest
The Associated Press reported that the diesel records landed right as growers need fuel to run combines, tractors and grain trucks to bring in corn and soybeans. Those same farmers already paid more this year for fertilizer, seed and equipment.
A farmer cannot wait six months for a better fuel price. When the crop is ready, it has to come in, and leaving it in the field risks weather damage and lost yield. So he pays whatever the fuel dealer charges that week, often while selling that crop into a soft market. Farms can borrow, delay equipment purchases and cut corners for a season or two, but eventually some operations stop making the numbers work and sell out.
Why this matters to you: food security is not only about whether there is enough corn in Iowa. It depends on whether farmers can afford to grow it and truckers can afford to haul it. Farmers are deciding right now what they can afford to plant next spring, so high fuel costs this fall can shrink next year’s harvest before most shoppers notice anything. Every independent farm that disappears leaves the food supply more dependent on a handful of giant producers, and a system with fewer players has fewer places to absorb the next shock.
The Export Ban Being Floated in Washington Would Not Put More Diesel in Your Tank
With the midterms about 50 days out, the White House is under heavy pressure to do something about fuel prices. The idea that keeps coming back is banning American exports of diesel and gasoline.
Bloomberg reported Friday that a ban is still a long shot but no longer unthinkable. Ag Bull Trading, citing the Bloomberg report, noted that Rapidan Energy Group puts the odds of export restrictions around 35 percent. Energy Secretary Chris Wright has not ruled it out. The United States has never banned exports of refined fuel, and nearly 3 million barrels a day of transportation fuels are currently shipped overseas.
On television, a ban sounds simple: keep American diesel in America and the price comes down. The people who actually work in fuel markets mostly say it does not work that way. Analysts told S&P Global that banning product exports would damage refinery economics without clearly freeing up more supply.
The problem is capacity. Trading Economics reported that U.S. refineries were running at 97.8 percent in early September, with distillate inventories, which include diesel and heating oil, sitting 13 percent below the five-year average. There is no warehouse of spare diesel waiting to be released. A ban would reshuffle who gets the supply that already exists, gut the export business Gulf Coast refiners built their operations around, and give those refiners a reason to cut runs, which means less fuel gets made.
Russia, the other giant diesel exporter, already shut off its diesel exports after months of Ukrainian drone strikes on its refineries, CNBC reported. If the United States follows, the two biggest suppliers in the world are off the market at the same time, prices overseas spike, and allied countries holding huge amounts of U.S. debt start scrambling for fuel. We already covered what happens when bond yields start climbing, and an energy panic abroad is the last thing that market needs.
Why this matters to you: a system running at 98 percent has no cushion. When there is spare refining capacity and full storage tanks, a refinery fire or a hurricane in the Gulf is a local headache. With no spare capacity and inventories this low, the same outage can turn into a nationwide price spike, or into stations running dry in the region where it happens. The fact that Washington is even discussing a measure this country has never used tells you how few normal tools are left, and you should plan as if a single refinery outage this fall could hit your area hard.
Saudi Oil Is Running Out of Ways to Leave the Kingdom
On Friday, the big question was how long the East-West pipeline would stay down. Now there are answers, and none of them are good.
Two regional officials told the Associated Press, via ABC News, that the pipeline will be mostly out of service for weeks, and PBS put the repair estimate at three to five weeks. Vortexa tanker data cited by OilPrice.com shows no Saudi crude has left Yanbu since September 11. Aramco has canceled or delayed late-September cargoes to at least three European refiners, some pushed out to November, with two more refiners expecting similar notices. Poland’s Orlen, which gets about 40 percent of its crude from Aramco, is already buying replacement barrels from the North Sea, Kazakhstan and the United States.
The other half of Saudi Arabia’s workaround got worse Monday. On Friday we reported that the Houthis had taken the port of Mokha and Perim Island at the mouth of the Bab el-Mandeb Strait. Now they have seized Greater and Lesser Hanish, two more islands in the southern Red Sea, PBS NewsHour reported. According to the AP, the United Arab Emirates had held those islands with its Yemeni allies until it pulled its military setup out after a falling-out with Saudi Arabia earlier this year, and the Houthis walked right into the gap.
The pipeline and the Red Sea were never two separate backup plans. Saudi crude crossed the desert by pipeline to Yanbu, then left by tanker through the Red Sea. The pipeline is down for weeks, and the southern exit is now overlooked from the coast and the islands by the same militia firing missiles into Saudi cities. AGBI reported, citing Kpler data, that no Saudi-flagged ship has even tried the crossing since July 19, and analysts warned the risk could spread to any tanker that stopped at Yanbu.
Why this matters to you: oil trades on a world market, so a refinery in Poland that loses its Saudi crude becomes a direct competitor for American barrels and American diesel. That demand pulls more supply overseas in the same week politicians are arguing about stopping exports. And when a market is already this tight, it does not take losing all the world’s oil to cause damage. Losing a few more percent forces buyers to bid against each other for what is left, and the buyers who get squeezed out first are the ones with the least money.
Heating Oil Is Already Past $5 and the First Frost Has Not Hit Yet
Heating oil and diesel come from the same part of the barrel and compete for the same shrinking supply. When diesel sets records, heating oil follows.
In Connecticut, heating oil climbed above $5 a gallon, WFSB reported, roughly $2 more per gallon than this time last year. In Maine, the statewide average hit $5.39 as of September 8, according to Maine Public. An Axios markets reporter said his own oil company in the New York suburbs quoted him $6.86.
In Friday’s piece, we put a typical Northeast oil-heat home at 800 to 1,050 gallons for a winter. At $2 more per gallon, that works out to between $1,600 and $2,100 in extra heating costs this season, for the same house at the same thermostat setting. That assumes prices stop climbing and the winter stays mild.
Tommy Cole Jr. is a Marine Corps veteran raising a family of five in a rental in Winchester, Massachusetts. He told CNN that last winter, with oil under $4, he still needed federal heating assistance several times and ran space heaters that sent his electric bill through the roof. The oil he is about to have delivered will cost $5.56 a gallon. A community action agency in Fall River told CNN its average assistance grant last winter was just over $1,000, enough for a little more than one tank, and this year’s state awards have not even been announced.
Why this matters to you: the real danger is not a painful bill. It is what people do when they cannot afford the next delivery in January. They run space heaters around the clock, drag old kerosene heaters out of the garage, heat with the oven and let the tank run dangerously low. That is how a fuel price problem turns into frozen pipes, house fires and carbon monoxide deaths. And these prices are showing up before winter demand even starts, so when cold weather arrives, home heating and diesel trucks will be bidding for the same short supply at the same time.
Costco Rationing Motor Oil Is the Same Crisis Showing Up Somewhere Else
As we covered Monday, Costco is now limiting Kirkland full-synthetic motor oil to two boxes per member per week, and the price has nearly doubled from about $30 to $58. Mobil 1 is capped at five per membership. The current limits still cover normal household maintenance, so nobody needs to panic over their next oil change.
Why this matters to you: a warehouse chain built on bulk buying does not ration a product unless the people running its inventory are worried about supply, price or both. Refiners make far more money turning crude into diesel and gasoline right now than into lubricants, and the same pressure can tighten plastics, packaging, tires and other petroleum-based products. Not every one of those will show up as an empty shelf. Some will just cost more, come in smaller packages or quietly disappear from store inventory, and you will not get a warning when it happens.
What to Watch Over the Next Few Weeks
The question is not whether diesel moves another 20 cents this week. The question is whether several of these pressure points move the wrong way at the same time, because that is when an expensive fuel problem becomes an availability problem.
Watch the EIA’s weekly petroleum report, which comes out on Wednesdays. If distillate inventories keep falling while refineries are already near 98 percent, there is nothing left to cover an outage. Watch for any refinery fire, hurricane or unplanned shutdown, especially in the Gulf Coast or Midwest, because the system has no slack to absorb one right now.
Watch the Saudi pipeline restart date and any further Houthi moves around the Bab el-Mandeb. Watch whether the White House actually announces export restrictions. And watch heating oil prices as the weather turns, because cold weather in the Northeast adds a whole new group of buyers competing for the same distillate.
Why this matters to you: none of these items alone means the pumps go dry. Several of them hitting at once is how regional shortages happen, and regional shortages trigger the panic buying that makes them worse. We saw it with gasoline after the Colonial Pipeline hack and with toilet paper in 2020. The time to act is before the public decides something is running out, not after.
What to Do Before $7 Diesel Shows Up at Your Pump
If you have not read it yet, Friday’s article covers the basics: locking in heating costs, storing fuel safely and legally, stocking the pantry, cutting fuel waste and building local relationships. Everything in it still applies. What changed this week is the timeline, and that calls for a few more moves on top of that list.
If you run diesel in the Great Lakes states, fill up now. De Haan’s warning is based on spot prices that have not reached retail yet, so the price at the pump in Michigan, Ohio, Indiana and Illinois is likely lagging behind what the market has already done. If you have a farm tank, work truck, tractor or diesel generator, topping off this week beats paying $7 next week. Store only what you can legally and safely keep, and treat anything going into long-term storage with a stabilizer, because fuel that goes bad in the tank is money burned for nothing.
If you heat with oil, call your dealer this week. Ask whether they still offer a price lock or pre-buy program. Dealers can pull those offers when wholesale prices move this fast, and the first cold snap is when every one of your neighbors will be making the same call. If a lock is off the table and you have room in the tank, filling it now at $5 is likely cheaper than filling it in December with winter demand stacked on top of an already tight supply.
Apply for heating assistance early if you qualify. LIHEAP money is limited, and agencies are already warning that the same grant will buy fewer gallons this winter. People who apply in October are generally served before the funds run thin, and people who wait until January take their chances.
Get your backup heat plan right before you need it. If a kerosene heater, propane heater or wood stove is part of your plan, make sure it is rated for how you intend to use it, you have enough fuel stored safely, and you have working carbon monoxide detectors on every level of the house. When heating bills spike, people start heating with ovens, grills and generators in the garage, and every winter some of them do not wake up. A detector costs less than a tank of heating oil.
Buy the motor oil and filters for your next two oil changes. That is not hoarding. It is maintenance you were going to do anyway, bought before the price rises again. A breakdown is far more expensive when towing, parts and shipping costs are all climbing with fuel, so keep the vehicles in good shape now.
Stock food before the fuel surcharges reach the grocery store. Trucking companies like the one in Girard are already adding surcharges, and those take weeks to show up in shelf prices. Buy extra of what your family already eats, plus pet food, medications, batteries and hygiene supplies you know you will use. A deeper pantry lets you wait out a price spike instead of buying at the top alongside everyone else. Our guide on long-term food storage breaks down what actually lasts and what goes bad in the basement.
Do not wait for an export ban announcement. If the White House restricts fuel exports, expect price swings in both directions and a lot of confusion about what it means. The people who topped off and stocked up before that headline will be sitting comfortably while everyone else crowds the stations. For the bigger financial picture, start with our guide to preparing for an economic collapse.
None of this requires believing the country is about to collapse. You do not need a national fuel shortage for $7 diesel to wreck your budget, and you do not need empty stores for a jump in grocery prices to hurt. Maybe the pipeline comes back early, Hormuz improves and prices ease, and everybody should hope that happens. If it does, you used everything you bought. If it does not, you are the household that does not have to panic.
Working Families Are Paying for Decisions Made Far Above Their Heads
The trucker in Girard did not start a war with Iran. The farmer bringing in corn did not burn out a Saudi pump station or hand the Houthis the islands guarding the Red Sea. The Marine veteran in Winchester did not decide that federal heating assistance should buy fewer gallons every year while oil prices climb.
Those decisions were made by governments on both sides of the Atlantic and both sides of the aisle, over decades, by people who let fuel inventories run thin and refining capacity max out while assuming cheap energy would always be there. Now the bill has arrived, and it is not landing on them.
And instead of a real plan, Washington is spending the last 50 days before an election debating an export ban that most of the people who actually understand fuel markets say will not lower prices at all. It is a political stunt while diesel heads for $7, heating oil tops $5 before the first frost, and working Americans are left to figure out on their own how to keep their trucks running, their crops coming in and their kids warm this winter. Nobody in Washington is coming to fill your tank. They had years to prepare for this, they did not, and now they expect you to pay for it and keep quiet.
Related Reads
- Saudi Pipeline Attacked, Diesel at $6: The Fuel Crisis That Could Upend Economy
- Here We Go Again: Costco Starts Rationing Motor Oil as Supply Chain Cracks
- Your Dollar Is About to Lose Half Its Buying Power and the National Debt Just Hit $40 Trillion
- Bond Yields Soar as Global Panic Builds: Is a Stock Market Crash Imminent?
- Long-Term Food Storage: What Actually Lasts 25 Years (And What Rots in Your Basement)
- OFFGRID Survival Family Preparedness Manual
