Diesel futures in Europe have risen to their highest level since 2022, with the impact of the Iran war on fuel supplies driving the global economy.

Futures contracts traded higher, reaching $1,498 per ton, or more than $200 per barrel, after jumping by about 9.7% in London.

Prices have nearly doubled since the outbreak of the war in the Middle East over a month ago, following U.S. and Israeli attacks on Iran, and Tehran's response, which led to an effective closure of the vital Strait of Hormuz.

Lack of Indicators

The halt in traffic through the strait has cut millions of barrels from supplies of refined products like diesel. Crude oil prices in London have surged by about 50%, forcing some refineries to reduce fuel production. Traders around the world are seeking to secure supplies, as diesel shipments have been diverted and sent on long journeys exceeding 12,000 miles.

With no clear indicators on when the Strait of Hormuz will fully reopen, pressures on diesel markets are increasing. This fuel is a lifeline for the global economy, as it is used to power everything from trucks to construction equipment, and rising prices threaten to increase inflation worldwide.