Diesel Shortage is Here!

Diesel Shortage is Here!

Diesel Shortage, Part Two

Oct 7, 2026 

It’s here

Hello again and as usual, thank you for reading my blog. Back in June, I told you I was scared of the diesel shortage. I said it wasn’t a headline yet, and that by the time it hit the evening news, rates would already have moved.

Well, the Chevron CEO was on the news today warning about stopping diesel exports, CNBC. What a short road it was to Texas declaring a statewide disaster over diesel prices and availability. This is what I was afraid of happening.

Here is where things stand, what it is doing to your freight costs, and what I would do right now if I were shipping out of Houston.

Where diesel stands right now

Before the Iran war, diesel was about $3.76 a gallon nationally. It peaked at a record $6.53 on September 22, according to AAA. That is up roughly 77% this year, on track for the biggest annual jump since AAA started tracking in 2000. (CNN)

In Texas, the disaster allows red-dyed diesel on the road and raises weight limits on fuel, farm and timber loads. The Federal Government has followed suit with the tax-exempt diesel, attempting to defer excise tax on October 5^th with an Executive Order. This will save truckers at the pump, much needed!

Prices have backed off a little since the peak. But do not mistake that for relief. U.S. diesel inventories are still running roughly 15% below the five-year average (OAF Nation), and the war, the damage to Russian fuel exports, and the refinery closures I wrote about in June have not gone anywhere. The EIA expects diesel to stay above $6 through October and only ease to an average of about $4.50 in 2027. (IndexBox, citing EIA)

Red-dyed diesel on the highway is a bandage. It is the same fuel from the same refineries, just moved from one tank to another. It does not make more of it.

How it reaches your invoice

Diesel is not a sticker shock expense, it slowly drains you. Spot rates in September 39% higher than 2025. The owner operators are forced to park and that makes capacity tighter for everyone.

Then ocean and rail. Ships and trains burn fuel too, and carriers pass it through in fuel and bunker surcharges. Those adjust more slowly, so expect to see them creep onto your ocean and rail quotes over the coming weeks and months.

Then the shelf. Every product at a big box store rode on a truck at least once, usually several times. Farmers are paying record prices to run tractors and haul harvests. Freight is a small piece of the price of any one item, but it is in the price of every item. That is how a shortage at the refinery becomes a higher grocery bill.

What it means for Houston and Mexico freight

There is one piece of good news for us. The Gulf Coast has had the cheapest diesel in the country through this whole run. In mid-September, diesel averaged about $6.03 here versus $7.25 on the West Coast (TankTransport). We sit next to the refineries.

That makes routing more important than ever. Cargo that lands in Los Angeles and rides a truck or train halfway across the country is burning the most expensive diesel in America, mile after mile. Cargo that comes through the Port of Houston and stays close to home burns less of it, and cheaper. Every unnecessary mile is diesel you are paying for.

Cross-border freight with Mexico runs almost entirely on trucks, and trucks run on diesel. If you move goods through Laredo, El Paso or Brownsville, you will feel this first. But the short distances work in your favor too. A few hundred miles of expensive diesel still beats a six-week ocean crossing plus a long inland haul.

I have people that want their freight to arrive in LA and truck to Houston. We will see if that continues to be their preference.

What I would do right now

Cut the miles. Look hard at where your cargo lands and how far it travels inland. Coming through Houston instead of a distant coast can take a lot of expensive diesel out of your landed cost.

Do not count on a quick fix. Dyed diesel and executive orders may take the edge off at the pump. They do not build refineries. Plan your budget for high fuel into 2027.

Talk to a real forwarder. Someone who picks up the phone, knows your cargo, and can show you more than one way to move it. When fuel is this expensive, the route is where the money is.

I told you in June this was coming. Now it is here, and the shippers who plan around it will still be moving freight when everyone else is scrambling. I am always available and would love to talk with you.

Diana Stinson President,

Texas Global Services

FMC Licensed Ocean Transportation Intermediary