Diesel Prices Stay Near Record Highs as Construction Costs Climb and Hormuz Traffic Data Conflicts

Since diesel hit a record national average of $5.85 a gallon on September 4, according to AAA and fuel-tracking service GasBuddy, prices have pulled back only modestly. The Energy Information Administration's on-highway diesel figure sat at $5.65 a gallon this week, according to Fox News, still nearly $2 higher than a year ago and well above the pre-war average of $3.76 recorded before the U.S. and Israel struck Iran in late February.

Regular gasoline has followed a similar pattern. AAA put the national average at $4.14 to $4.15 heading into Labor Day weekend, the highest ever recorded for that holiday and well above the previous Labor Day record of $3.82 set in 2012. By this week Fox News reported the average had eased slightly to around $4.09.

The Squeeze Reaches Construction Sites

Diesel's climb is now showing up somewhere most Americans don't watch closely: home construction. Jim Tobin, president and CEO of the National Association of Home Builders, told Fox News Digital that diesel is "critical to construction" because it powers the trucks hauling lumber and concrete and the heavy equipment moving dirt on job sites.

"That has really put a little bit of pressure on home building in the short term here," Tobin said.

The timing is awkward for the White House. President Trump signed an executive order in March directing federal agencies to cut regulatory barriers on housing, part of a broader affordability push heading into the midterms. Builders had largely absorbed tariff-driven material costs, per Fox News, but diesel is proving harder to dodge because it filters through the entire supply chain before showing up in a final home price.

What's Driving It

Multiple factors are stacking on top of each other. Renewed U.S.-Iran military exchanges have kept oil traffic through the Strait of Hormuz depressed, according to the Epoch Times, with preliminary shipping data showing just four commodity vessels transiting the waterway on one recent Thursday compared with a 10-day average of about 15.

Ukrainian drone strikes on Russian refineries have cut into global diesel supply as well, Breitbart reported, citing Matthew Metzgar, a clinical professor of economics at UNC Charlotte, who said Chinese refiners are also seeing declining output. Tom Seng, a professor of energy finance at Texas Christian University, told Breitbart that domestic refineries are running near 98 percent capacity in Texas heat, leaving little cushion if a hurricane or mechanical failure knocks a plant offline.

Brent crude, the international benchmark, was trading above $95 a barrel as of early September, according to the Epoch Times, up from roughly $70 before the war. Claudio Galimberti, chief economist at Rystad Energy, said the diesel spike is even bleeding into bond markets: "This is one of the reasons why the government bond yields in the United States are so high, it's the expectation that inflation will continue to go up."

A Numbers Gap on Hormuz

Daily Wire reported American officials said a wartime-high 18 million barrels moved through the Strait of Hormuz on a recent Tuesday, and the Epoch Times separately flagged a U.S. claim of more than 17 million barrels passing through on a Monday. Yet the Epoch Times' own shipping data for that same window showed vessel traffic running at roughly a quarter of its 10-day average. Barrel-volume claims and vessel-count data aren't strictly contradictory, since fewer, larger shipments could account for both, but neither the administration nor independent trackers cited in these reports have reconciled the two figures publicly.

Energy Secretary Chris Wright, asked on ABC's "This Week" when drivers might see relief, offered no timeline. "Yes, they're higher today, but we're doing everything we can to push them down," Wright said.

Trump has pointed to a separate lever: a deal he says gives the U.S. majority control of more than 65 billion barrels of Venezuelan oil reserves. "This Historic Transaction MORE THAN DOUBLES American Oil Reserves, greatly increases our Oil Supply, and will substantially lower Gas Prices for all Americans, long into the future," Trump wrote, according to Daily Wire. That claim is Trump's own characterization of the deal's future impact; none of the reports reviewed here show it has moved prices yet.

A Different Playbook in Brazil

While Washington waits on markets and diplomacy, Brazil's government took the direct route. With Brent crude briefly topping $100 a barrel and a presidential election weeks away, President Luiz Inácio Lula da Silva's government ordered new fuel tax cuts, according to BigGo Finance and a Reuters report carried by TradingView. State-run Petrobras had announced, then reversed within hours, a gasoline price hike, ultimately delivering a net 0.19 real per liter cut to distributors after the government expanded its gasoline subsidy, zeroed out ethanol taxes, and added a 1 real per liter diesel subsidy on top of an existing 1.12 real subsidy.

That's a government absorbing the cost directly through taxpayer-funded subsidies rather than letting the market work through it, a politically convenient move with an election on the calendar. Whether that approach holds once the vote passes, or whether U.S. diesel prices ease as refineries shift to winter blends and the Hormuz standoff cools, remains unresolved. AAA's own analysis noted this Labor Day was "different" because falling seasonal demand couldn't offset the war-driven cost of crude, a dynamic that hasn't changed as of this week.