Diesel prices plunge as US-Iran war fears ease and peace hopes rise

U.S. retail diesel fell to $4.668 a gallon for the week of June 29, 2026, while the U.S. Energy Information Administration put June’s monthly sales price at $5.024 a gallon, still expensive but sharply lower than the spring spike.

The slide followed a reversal in the oil market after the Iran conflict jolted supply expectations across the Middle East. Brent crude had climbed from about $72 a barrel on February 27 to nearly $120 at its peak as traders priced in the risk of disruption through the Strait of Hormuz, the narrow shipping route that carries about a fifth of the world’s oil. When the conflict began in late February, the EIA projected diesel and jet fuel wholesale prices would rise more than 60 percent in 2026 versus its pre-conflict February forecast.

Oil prices fell to a three-month low as hopes grew that the Strait of Hormuz would reopen and shipping lanes could normalize. On June 26, U.S. diesel futures crack spreads hit a three-week high. Diesel posted its biggest monthly fall in 26 years.

The biggest price changes showed up in the second quarter because of supply concerns tied to the de facto closure of the Strait of Hormuz, especially for diesel and jet fuel. Diesel is one of the biggest operating costs for trucking companies, so a sustained drop can eventually filter into freight rates, farm costs and store shelves. The path from cheaper crude to lower delivered prices can take months, because oil already in the system still has to move through refineries, inventories and distribution channels before consumers see the full benefit.