Diesel prices see declines with forecasts of more ahead as OPEC continues to boost supply

Diesel prices are dropping with forecasts of more to come, in a speck of good news for shippers and carriers alike.

Since hitting its 2025 high during the week ending July 21, the national average price of diesel nationwide is down 10 cents to around $3.76 a gallon according to the latest update from the Energy Information Administration (EIA).

This has spurred concerns about a potential glut in worldwide oil supplies.

Fuel prices peaked at $3.81 a gallon last month, but five consecutive weeks of declines—three of the five saw a decrease of less than a penny—the national average for a gallon of on-highway diesel was at $3.71 a gallon for the week ending Aug. 25. That compared with about $4.50 a gallon in mid-October of 2024.

Part of the reason for the drop is seasonal with the end of the summer driving season. But the Organization of Petroleum Exporting Countries (OPEC) has raised its oil-demand forecast for 2026. The cartel expects oil demand globally to grow by 1.38 million barrels a day next year, up from $1.28 billion gallons earlier.

U.S. economic growth is forecast to hit 1.8% this year with forecasts of around 2.1% next year. European growth is expected around 1.2% both years.

Predicting future diesel prices has proven to be a fool’s game among trucking executives. They say noted that while lower fuel prices helps cash flow and operational costs on the margins, the overall impact on profitability was limited by the tough rate environment facing most carriers.

Some larger carriers, like Knight-Swift, say they’re hoping for gradual rate increases in early 2026, although the overall dismal trucking environment makes this iffy at best.

Meantime, trucking fuel surcharges have been dropping. Fuel surcharges for LTL freight at Old Dominion Freight Line, for example, were about 27.8% in early September this year. Truckload fuel surcharges, which are based on a per-mile basis at some TL carriers, hovered around 37 cents a mile, at press time.

In geopolitical news, there were reports of explosions on a Moscow oil pipeline recently. Ukraine claimed it hit two more Russian oil refineries recently, according to a Bloomberg report. It said the Kuibyshev refinery and the Afipsky Refinery were hit.

Ukrinform reported that a main pipeline supplying oil products to Moscow exploded in Russia’s Ryazan region. In late summer, a powerful explosion occurred on the Ryazan–Moscow oil pipeline, one of the main supply routes for petroleum products to the Russian capital.

Interfax reported that Russian oil supply to Hungary and Slovakia has resumed through the Druzhba pipeline.

This comes as ExxonMobil was in secret talks with Russia to resume working in the oil fields assuming that the ceasefire between Russia and Ukraine occurs, according to a report in the Wall Street Journal. Exxon and Russia entered into a $500 billion partnership that has been on hold since the start of the Ukraine-Russia war. 

Yet, diesel prices in the U.S. remain largely unmoved, even dropping a bit. This despite a 12% drop since New Year’s Day in the value of the U.S. dollar, the currency used by the world oil market.

“Despite all these market-moving headlines, prices just refuse to budge—traders are glued to that narrow range, almost as if they’re waiting for a spark to set things in motion,” said Phil Flynn, oil analyst for Price Futures Group, a research firm.

Distillate fuel inventories are about 15% below the five-year average for this time of year. The supplied volumes are up a robust 7.7% year-over-year, coming in at 3.9 million barrels a day, according to Flynn.

That helps explain why ExxonMobil announced that its Baytown, Texas, facility will pivot towards increased diesel production by 2028.

Gasoline demand on the four-week moving average was 9 million barrels a day in late summer, which is actually down 1.1% compared to last year’s demand.

 “It’s the classic push and pull—bulls and bears in a stalemate while everyone waits for the next shoe to drop,” Flynn added.

   Crude oil forecasts show the Brent worldwide oil prices hovering around $63.50 in the fourth quarter. That is down about $1 a barrel from forecasts made just a month ago.