Diesel prices in the Chicago area reached record highs as the Strait of Hormuz faces disruption tied to the U.S.-Israel war with Iran. Truckers, farmers, and delivery companies say they’re absorbing higher costs or adjusting routes and fees—pressures that are
At 5:30 a.m., Ricardo Guerrero pulls into the Loop to start another day serving Mexican food outside the Art Institute of Chicago and the Shedd Aquarium. He has run three food trucks for five years, but this year has gotten harder in a way he can’t dodge.
Guerrero says rising diesel—and even gasoline—has forced him to spend hundreds of dollars more each week just to keep operating. For many consumers, cutting back on gas is a choice. For diesel users. the fuel’s price leaks into everything they buy and sell. because it shows up in the cost of getting goods to market.
“People have been focusing on gas prices because that’s what hits them [at the pump]. But diesel affects all of us as well because almost everything that you eat. drink. use in your daily life has been on a truck or a rail car at some point. ” Dana Regan. vice president of business development at TranzAct Technologies. said.
In Illinois and the Chicago area. diesel prices climbed to an all-time high less than three months after the U.S.-Israel war with Iran began in February. The average cost of diesel in the Chicago metro area reached a record $6.30 a gallon on May 15. Illinois diesel prices also set a record that day at $6.14 a gallon, according to GasBuddy. The previous record was $5.89 in the Chicago area, set in June 2022, a few months after Russia invaded Ukraine.
Nationally, the average diesel price on Thursday was $5.64 a gallon, 19 cents below the June 2022 record of $5.83.
The pressure is being felt far beyond the pump. Guerrero says he typically spends about $500 every five days to fill up his three food trucks—two run on gas and the third needs diesel. Now, he says, it costs him over $800.
In calmer times, Guerrero had planned to add three more Caseras Sabor Real food trucks. He says he would sell those trucks just to reinvest back into the three he already has.
Guerrero, 54, has built up savings over the years, but now he fears he’ll have to dip into that account to keep operations going. He estimates he could keep a seven-day schedule running for five more months.
When diesel gets expensive. his customers don’t just see it at checkout later—they feel it in the ingredients. too. Guerrero says he has been paying about 35% more for the ingredients in his quesabirria, or birria tacos, and its smoothies. He also says the price of meat and produce, including lettuce and tomatoes, has increased. To manage the cash crunch. he has worked out a line of credit with some suppliers so he can pay the following month.
He hasn’t missed payroll for his 15 food truck employees, but he says there have been times recently when he didn’t have enough funds to also pay himself. To cope, he raised his trucks’ food prices by about 10% since the war began, but he says he doesn’t want to increase prices further.
“[I] stress too much due to the fact that [I] want to give out a good price, but once [my] prices go up, it’s like, I don’t know what to do,” Guerrero said.
Officials and industry figures point to the same chain of cause: disruptions to oil shipping tied to Iran and the Strait of Hormuz.
Fuel prices have been climbing after Iran took control of the Strait of Hormuz. a narrow waterway between the Persian Gulf and the Gulf of Oman. Twenty percent of the world’s oil supply passes through the Strait. but Iran has essentially closed off access. with the average number of ships passing through daily dropping by 95%. according to the UN Conference on Trade and Development.
President Donald Trump said Thursday that he was against Iran’s plan to charge fees for passage through the Strait. “We want it open. We want it free. We don’t want tolls,” he said to reporters at the White House. “It’s an international waterway.”
Trump on Monday had threatened further attacks on Iran’s capital but pulled back, saying it was at the request of Gulf allies.
The Strait’s closure has caused what Sam Ori, executive director of the University of Chicago’s Institute for Climate and Sustainable Growth, described as the largest disruption the oil industry has ever faced.
For businesses that depend on diesel every day, the change is immediate. Michael Mahler. chief operating officer of HMD Trucking in Chicago Ridge. said the company’s bottom line worsened because of higher diesel prices. At the same time, he said the volatility has pushed the company to move quicker on its long-term plans.
“From a day-to-day operations standpoint. we are regularly analyzing routes to identify more affordable states for fueling along those routes. as well as eliminating or changing some routes altogether. ” Mahler said in a statement. “On a larger scale, the current and historical instability in fuel prices has significantly expedited our renewable energy strategy. We will aggressively add Tesla EV Semis later this year to better protect us from diesel fuel instability in the coming years.”.
Diesel in the Chicago metro area has increased by 71% year over year, according to GasBuddy. Last May, diesel was $3.63.
Economists say diesel’s effects don’t stay confined to transportation. Patrick De Haan, petroleum analyst at GasBuddy, said diesel “powers the U.S. economy” from trains to tractors and trucks and that supply chains up and down are built on it.
Rachel Bronson, senior fellow on energy and geopolitics at the Chicago Council on Global Affairs, said the jump in prices is likely to drive more inflation for consumers already facing rising living costs. For shoppers, the effect can show up in groceries even when it isn’t obvious.
“The transportation, shipping, farming and logistics industry run on diesel, and the jump in price will lead to more inflation for consumers already struggling with the rising living costs,” Bronson said.
Guerrero says his menu is already being reshaped by those pressures. Yet he’s not alone. Phillip Braun. a professor at Northwestern University. said the “number one [impact] will be food prices. due to the price of fertilizer.” He added that food production will be affected either by higher fertilizer cost or lower harvests because of fertilizer cost.
Crude oil is commonly used in fertilizer. The Green Markets Weekly North America Fertilizer Price Index reported Wednesday that fertilizer costs increased 30% year over year. An American Farm Bureau Federation survey in April among 5. 700 farmers found that 48% in the Midwest reported the greatest difficulty in securing fertilizer. The bureau said other regions reported a much harder time finding enough fertilizer.
The farm group also said farm diesel prices—“a major operating expense during spring planting”—have risen 46% since the end of February.
Bronson said increases in fertilizer and transportation costs will land in grocery aisles. She gave an example involving oranges imported to the U.S., saying higher transportation costs will make them cost more later or force stores to carry fewer oranges.
Transportation fuel price spikes act like a hidden tax on delivered goods, and logistics companies say they’re still catching up.
Regan said transportation and logistics companies weren’t prepared for the strain. “The biggest thing is people did not budget [for] a significant increase in transportation costs,” she said. “They prepare their 2026 budgets in 2025, and I don’t think anyone saw this coming. [Companies] have to pass the costs on downstream. It’s going to eventually affect the consumer.”.
Bronson said shipping, often the cheapest way to transport goods, is also facing headwinds as companies add fuel surcharges.
The U.S. Postal Service announced in March an 8% price increase on all packages that began April 26 and runs through Jan. 27, 2027. In a news release. the Postal Service said. “Transportation costs have been increasing. and our competitors have reacted with a number of surcharges.” It said it had avoided surcharges and that the new charge is less than one-third of what competitors charge for fuel alone.
FedEx has a 27.25% surcharge in place for ground, home delivery, international ground and pick up services. FedEx said the surcharge rate is 25.2% higher than its rates before the war, and that its rates are updated weekly based on national diesel fuel prices.
UPS told its customers that starting May 18, it was adding an extra 27.75% fee on top of typical shipping costs on domestic ground packages.
Bronson said the pressure is already translating into wider economic anxiety. “We’re feeling it in terms of price at the pump. but we’re really feeling it in terms of inflationary pressure that this energy crisis is causing for the everyday American. ” she said. “It’s probably the greatest concern for our economy right now.”.
Even if the Strait were to open, Bronson said inflationary impact likely won’t disappear right away. She said the unpredictability of the situation and “very little visibility and transparency” from leaders create an unstable market.
“Even if the Strait of Hormuz [is] open tomorrow, the infrastructure has been hit,” she said. “It takes time to put the energy back onto the market. … It’s already been damaged.”
diesel prices Chicago trucking farmers fertilizer costs Strait of Hormuz inflation GasBuddy UPS surcharge FedEx surcharge U.S. Postal Service package rate increase