Diesel Prices in California Hit Record High Amid Supply Disruptions

March 25, 2026

Los Angeles: US: Diesel prices in the US state of California have reached record highs. According to the latest data from the American Automobile Association (AAA), the average price of diesel on Tuesday was recorded at $7.018 per gallon, an all-time high.

In comparison, the average price of diesel across the US is around $5.345 per gallon, which is much lower than in California.

Iran War and Refinery Crisis Caused
According to media reports, the primary reason behind rising diesel prices is the reduction in oil refining capacity and disruptions to the global supply chain due to the ongoing war in Iran.

Two refineries in California have been shut down since October 2025, eliminating approximately 20 percent of the state’s refining capacity. This has directly impacted fuel supply.

Increased Pressure on Transport and Agriculture
Rising diesel prices are directly impacting transportation costs. This could also impact the prices of food, construction materials, and retail goods, as these are primarily transported by diesel trucks.

San Joaquin Farm Bureau Executive Director Andrew Genasky said, “The situation is extremely stressful for farmers. Everything that goes into and out of the fields has become more expensive.”

Closure of Strait of Hormuz Raises Concern
According to reports, the closure of the Strait of Hormuz in the Middle East has severely affected oil supplies. Even if the route reopens immediately, it will take time for oil to reach refineries, so prices are not expected to fall immediately.

According to AAA, this price is even higher than the level recorded in the early months of the Russia-Ukraine War in 2022.