Key Takeaways
- • The DOE/EIA benchmark retail diesel price used for most fuel surcharges fell 2 cents to $6.179/gallon, effective Monday October 12, 2026 and published Wednesday, marking a third straight weekly decline.
- • CME ULSD futures settled at $4.9344/gal on Tuesday, up from $4.642/gal on October 1, signaling that wholesale increases have not yet reached the retail pump.
- • Analysts see little impact from the Trump administration's Russian diesel supply deal, with volumes judged small relative to global demand.
- • AAA's daily national average diesel price rose two straight days to $6.2997/gal on Wednesday after a 17-day decline that began September 22 at $6.5276/gal.
- • Market volatility is tied to uncertainty over Strait of Hormuz oil flows, with analysts warning that strategic stock releases offer only temporary relief.
Summary
The benchmark diesel price used for most fuel surcharges, published by the Department of Energy and Energy Information Administration, fell for the third consecutive week to $6.179 per gallon, a decline of 2 cents from the prior week. The figure was effective Monday but published Wednesday, one day later than normal because of the Columbus Day holiday, according to FreightWaves reporter John Kingston.
The retail decline is diverging from the wholesale market. Ultra low sulfur diesel (ULSD) futures on CME settled at $4.642 per gallon on October 1 and at $4.9344 per gallon on Tuesday. Around 10:45 a.m. EDT Wednesday, ULSD was down about 1.2%, or 6.05 cents, at $4.8739 per gallon. Futures have been highly volatile over the past seven or eight trading days: ULSD settled at $4.5694 on October 6, rose above $4.88 within two days, fell to $4.7232 on Monday, then rose sharply Tuesday. Because wholesale moves typically take time to reach pump prices, FreightWaves expects the recent futures gains to flow through to retail.
The Trump administration's agreement to secure additional Russian diesel supplies has had little visible effect on prices. Under the deal, Russia is to supply more than 300,000 metric tons immediately, followed by 500,000 tonnes in November and 1 million tonnes later. Using S&P Global Energy's conversion of 7.45 barrels per metric ton, the initial volume equals roughly 2.235 million barrels. Analysts characterized the volumes as small: Masha Kotkin of the Center for Strategic and International Studies said the supply would be "a drop in the bucket" against global demand. U.S. non-jet distillate consumption is about 3.65 million barrels per day, according to the EIA, and OECD diesel demand is estimated at about 13 million barrels per day. Some members of Congress have criticized the Russia deal as illegal.
Other price indicators show a different trend at the pump. The AAA daily diesel average fell for 17 straight days from $6.5276 per gallon on September 22 to $6.2785 on the Friday before this week, then moved sideways before rising 3.3 cents over the last two days to $6.2997 on Wednesday. The DTS.USA average retail price in SONAR was $6.32 per gallon on Tuesday and Wednesday.
Supply uncertainty remains the main driver of volatility. Paul Sankey told CNBC that flows through the Strait of Hormuz are no longer free-flowing as before the war, and that they depend on military escorts at an estimated cost of about $35 per barrel. Ellen Wald of Transversal Consulting said markets have worked around supply constraints through strategic stock drawdowns, but that these measures have limits and do not durably lower prices without new supply. G7 members agreed earlier this month to release additional strategic stocks, reportedly after a U.S. threat of a diesel export ban. IEA members agreed in March to broader stock releases, and IEA executive director Fatih Birol urged members on Saturday to accelerate remaining releases, prioritizing diesel.
The retail decline is diverging from the wholesale market. Ultra low sulfur diesel (ULSD) futures on CME settled at $4.642 per gallon on October 1 and at $4.9344 per gallon on Tuesday. Around 10:45 a.m. EDT Wednesday, ULSD was down about 1.2%, or 6.05 cents, at $4.8739 per gallon. Futures have been highly volatile over the past seven or eight trading days: ULSD settled at $4.5694 on October 6, rose above $4.88 within two days, fell to $4.7232 on Monday, then rose sharply Tuesday. Because wholesale moves typically take time to reach pump prices, FreightWaves expects the recent futures gains to flow through to retail.
The Trump administration's agreement to secure additional Russian diesel supplies has had little visible effect on prices. Under the deal, Russia is to supply more than 300,000 metric tons immediately, followed by 500,000 tonnes in November and 1 million tonnes later. Using S&P Global Energy's conversion of 7.45 barrels per metric ton, the initial volume equals roughly 2.235 million barrels. Analysts characterized the volumes as small: Masha Kotkin of the Center for Strategic and International Studies said the supply would be "a drop in the bucket" against global demand. U.S. non-jet distillate consumption is about 3.65 million barrels per day, according to the EIA, and OECD diesel demand is estimated at about 13 million barrels per day. Some members of Congress have criticized the Russia deal as illegal.
Other price indicators show a different trend at the pump. The AAA daily diesel average fell for 17 straight days from $6.5276 per gallon on September 22 to $6.2785 on the Friday before this week, then moved sideways before rising 3.3 cents over the last two days to $6.2997 on Wednesday. The DTS.USA average retail price in SONAR was $6.32 per gallon on Tuesday and Wednesday.
Supply uncertainty remains the main driver of volatility. Paul Sankey told CNBC that flows through the Strait of Hormuz are no longer free-flowing as before the war, and that they depend on military escorts at an estimated cost of about $35 per barrel. Ellen Wald of Transversal Consulting said markets have worked around supply constraints through strategic stock drawdowns, but that these measures have limits and do not durably lower prices without new supply. G7 members agreed earlier this month to release additional strategic stocks, reportedly after a U.S. threat of a diesel export ban. IEA members agreed in March to broader stock releases, and IEA executive director Fatih Birol urged members on Saturday to accelerate remaining releases, prioritizing diesel.
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