What has been an already volatile year for energy prices continues as crude oil bounces up and down across the $100-a-barrel price point yet again. Middle East conflict and a short-term drawdown in domestic supplies fuels the rally.
What’s happened
Crude oil prices have had an extremely volatile year. In early 2026, crude oil futures were trading near $55 per barrel. The conflict in the Middle East began in late February and sent prices soaring to near $120 per barrel by mid-March. By late June, prices eased back down to $70, but ever since have been trending higher. Is a re-test of $120 in the works?
Americans are again feeling the rally in energy prices at the gas pump. According to the U.S. Energy Information Administration, U.S. regular gasoline prices are trading near $4.15 per gallon.
For those who need diesel fuel, the cost increase is much worse. On Sept. 4, diesel hit a record price in the U.S., skyrocketing to an average of $5.85 a gallon for the first time ever. That record did not last long, as on Sept. 8, it hit $5.95.
Before the U.S. and Israel launched their war against Iran in late February, the national average for a gallon of diesel was just below $4 in the U.S.
From a marketing perspective
In recent conversations with farmers as they gear up for fall, you can hear that inflection as they discuss that it is hard to be excited about $5 corn when the cost of fuel to fill combines, tractors and semis has soared as well — and right at harvest.
Besides the conflict in the Middle East, the other reason for higher diesel prices is 20-year lows in U.S. inventories of diesel and heating oil. EIA data show distillate inventories fell by 2.2 million barrels to 103.4 million for the week ending Aug. 26, nearly 15% below the five-year seasonal average, and down 5 million barrels over the previous six weeks.
And the other factor for higher diesel prices lies within the Black Sea region. Ukrainian attacks on refineries led Russia to halt diesel exports.
Prepare yourself
For the farmer getting ready to harvest, the costs add up. Unless a peace deal is reached in the Middle East or Black Sea region, it seems as though energy prices may stay elevated in the coming weeks.
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