A key benchmark for the price of oil rose to its highest level in five months on Friday, as investors assessed the impact of the Iran and Ukraine-Russia wars on global energy supplies. Brent crude oil, widely considered among the most important global energy prices, surpassed $110 a barrel shortly after 2:30 p.m. ET, its highest level since May. It was the first time West Texas Intermediate crude crossed the $100 threshold, closely watched by both traders and the public, since September. Friday’s price jumps will likely add to already high gasoline prices for American consumers in the coming days. As of Friday morning, regular gasoline averaged $4.32 per gallon nationwide. Diesel futures also rose more than 1% on Friday. The cost of this critical commercial fuel for agriculture and other industrial sectors has risen even faster than regular gasoline in recent months. Stocks fell on Friday, partly in response to the jump in energy prices. The S&P 500 fell more than 1%, while the Nasdaq Composite fell sharply 2% by mid-afternoon. Fuel prices around the world began their steady rise this spring, when the United States and Israel attacked Iran in late February, prompting the closure of the Strait of Hormuz. But an escalation of the war between Russia and Ukraine in recent months has led to an even more dramatic rise in the price of diesel. Russia has traditionally been one of the world’s largest diesel exporters. But the attack by Ukrainian forces on its energy infrastructure has knocked out much of its refining capacity. Similarly, energy assets in Ukraine have been the target of Russian attacks. As a result of the strikes, Russian diesel buyers have been forced to look elsewhere for their fuel supplies. But there are no clear opportunities to easily expand diesel production. Refineries in the United States and Europe are already running at near capacity to produce as much diesel fuel as possible. President Donald Trump is intensely focused on the high cost of diesel fuel because of its key role in raising inflation, a major issue for American voters in the Nov. 3 midterm elections. Trump has pressured U.S. allies to release some of their diesel and crude oil reserves, and recently signed an order to relax regulations on the use of off-road “red dye” diesel. When none of these actions resulted in a major reduction in diesel prices, Trump made the decision this month to ease US sanctions on Russia. The goal was to allow Russian President Vladimir Putin to release some of the Russian supplies to the global market. But the sanctions relief surprised world leaders and drew swift condemnation from U.S. lawmakers of both parties. While Trump has touted the deal with Putin as a way to lower prices, as of Friday no Russian diesel had been identified as having reached the global market. Russia’s refining infrastructure has been severely damaged by the Ukrainian attacks. On Friday, another Russian refinery suspended some crude oil operations. The Russian Defense Ministry said Ukraine had “attempted a massive attack on the Ryazan oil refinery.” Additionally, a group of US lawmakers introduced a bill that would block Trump’s deal on Russian diesel. It has little chance of passing the Republican-controlled House. But polls indicate that Republicans are unlikely to maintain a majority in the House after the November elections. The Russian diesel blocking bill offers a preview of the type of legislation that could advance under Democratic control. Even now, however, the legislation adds to “growing doubts that a U.S.-Russia diesel deal will come to fruition,” said Mason Mendez, global real assets analyst at Wells Fargo. “Investors also remain concerned about further military escalation in the Middle East, as attacks on commercial shipping and regional infrastructure have increased in recent weeks,” he said. “Looking ahead to 2027, the need to rebuild depleted global inventories could create an additional source of demand and keep energy prices elevated for longer.”
