America runs on gasoline, but the midterms could swing on diesel.
That’s what Macquarie strategists, including Macquaire Energy Strategist Walt Chancellor, said in a Macquarie report sent to Rigzone recently, which flagged U.S. President Donald Trump’s “recent sharp focus on diesel”.
“The U.S. consumer runs on gasoline,” the strategists said in the report.
“Accordingly, President Trump’s recent sharp focus on diesel seems curious at first glance,” they added.
“Of course, record diesel prices are highly visible on American street corners, provide ample headline fodder, and make inflationary pressures tangible,” they continued.
“With prediction markets heavily leaning toward a Democratic flip of the House, the Senate likely decides control of Congress. Drilling in on the Senate, the importance of diesel begins to emerge,” they went on to state.
The strategists outlined in the report that control of the Senate could boil down to seven or eight “highly contested” races.
“Among this group, we would consider five such races to be in ‘diesel-sensitive’ states (Alaska, Maine, Iowa, Kansas, New Hampshire); excluding transportation (mainly trucking), estimated per capita diesel consumption in these states is ~2-9x the national average,” they highlighted.
“Further, the early-November election falls in a key window for non-trucking diesel demand, with harvest season in farm states (Sep. to Nov.) and winter approaching in states that are reliant on heating oil,” they added.
“From this perspective, we can see a more compelling logic behind Trump’s diesel initiatives,” the strategists noted.
“While elections clearly hinge on much more than fuel prices, given this apparent sensitivity to diesel at precisely this moment, we would not be surprised to see continued efforts to manage both the perception and the reality of the issue in the near-term,” they said.
“In short, we don’t think the diesel headlines will be going away ahead of the midterms,” they projected in the report.
USA Gasoline, Diesel
In a blog posted on its website on Monday, GasBuddy announced that the average price of gasoline in the U.S. had fallen 5.5 cents over the last week and stood at $4.24 per gallon, according to GasBuddy data.
“The national average is down 23.0 cents from a month ago and is $1.26 per gallon higher than a year ago,” GasBuddy highlighted in the blog.
The national average price of diesel rose 5.2 cents in the last week and stood at $6.300 per gallon, the blog revealed.
“Average gasoline prices declined in the vast majority of states over the last week, led by a combination of state fuel tax suspensions and price-cycling markets working their way back down, while diesel rose in most states, though the largest diesel decline was driven by a state tax suspension,” Patrick De Haan, head of petroleum analysis at GasBuddy, stated in the blog.
“For now, the outlook remains tied to geopolitical developments, and some price-cycling states could see upward swings in the days ahead if oil markets firm at all,” he added.
“Motorists in states that benefited from tax suspensions may continue to see some insulation from broader market pressures, but the overall picture remains fluid,” he continued.
According to the blog, the most common U.S. gas price encountered by motorists was $3.99 per gallon, “unchanged from a week ago”. This was followed by $4.19 per gallon, $3.89 per gallon, $4.09 per gallon, and $4.29 per gallon, the blog outlined.
The states with the lowest average prices comprised North Carolina, at $3.58 per gallon, Georgia, at $3.69 per gallon, and Texas, at $3.73 per gallon, while the states with the highest average prices comprised California, at $6.12 per gallon, Hawaii, at $5.55 per gallon, and Washington, at $5.33 per gallon, the blog revealed.
The most common U.S. diesel price stood at $5.99 per gallon, also “unchanged from last week”, the blog highlighted. This was followed by $6.29 per gallon, $6.39 per gallon, $6.19 per gallon, and $6.59 per gallon, the blog pointed out.
The states with the lowest average diesel prices comprised North Carolina, at $5.57 per gallon, Georgia, at $5.70 per gallon, and Louisiana, at $5.74 per gallon, while the states with the highest average diesel prices were California, at $8.47 per gallon, Washington, at $7.26 per gallon, and Hawaii, at $7.10 per gallon, according to the blog.
Price Projection Increase
In its latest short term energy outlook (STEO), the U.S. Energy Information Administration (EIA) increased its U.S. gasoline and diesel fuel price projections for both 2026 and 2027, compared to its previous STEO, which was released in September.
According to its October STEO, the EIA now sees the U.S. regular gasoline retail price averaging $3.91 per gallon in 2026 and $3.56 per gallon in 2027, and the U.S. on-highway diesel fuel price coming in at $5.19 per gallon this year and $4.49 per gallon next year. In its previous September STEO, the EIA saw the gasoline price averaging $3.84 per gallon in 2026 and $3.35 per gallon in 2027, and the diesel price coming in at $5.07 per gallon this year and $4.40 per gallon next year.
“U.S. retail prices for both diesel and gasoline increased in September,” the EIA noted in its October STEO.
“Retail gasoline prices averaged $4.35 per gallon, and retail diesel prices averaged $6.29 per gallon. The increase in retail prices was driven by higher crude oil prices in addition to rising crack spreads,” the EIA added.
“Most of the increase in gasoline crack spreads occurred at the beginning of the month and distillate crack spreads increased throughout the month,” it continued.
The EIA highlighted in its latest STEO that it forecasts that retail distillate prices will remain above $6 per gallon this month then “come down gradually with crude oil prices and a slight recovery in inventories”, which they said they expect “will help lower crack spreads”.
“Although we expect crack spreads will decrease, we forecast they will remain high relative to historical averages,” the EIA warned.
“We expect U.S. distillate fuel inventories to remain below the 2021-2025 average throughout the forecast period, however, keeping diesel crack spreads elevated and retail prices above $4 per gallon through 2027,” it added.
“We forecast retail gasoline prices will be about the same in October as September and then slowly decrease with crude oil prices,” it continued.
“We expect the gasoline crack spread to decrease but remain above seasonal averages through the beginning of 2027 due to low U.S. inventories,” it went on to note.
The EIA highlighted in its October STEO that decreases in wholesale crack spreads will not immediately translate into lower retail prices.
“Crack spreads reflect the difference between crude oil prices and wholesale prices,” it pointed out.
“However, the difference between our wholesale price estimates and retail prices reflect the added cost of fuel taxes and margins for retail and distribution,” it added.
“So far in 2026, these retail and distribution margins have been depressed because of surging wholesale prices, but we expect them to increase back above the five-year average in 2027 after wholesale prices begin to decrease,” it continued.
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