(The Economic Collapse Blog)—As you enjoy your Labor Day weekend, you may notice that gasoline and diesel are unusually expensive right now. As I will document in this article, gasoline prices have never been this high on Labor Day weekend, and the cost of diesel is now the highest that it has ever been in the entire history of our country.
Needless to say, the soaring cost of diesel is really bad news for our economy, because most of our trains, most of our tractors and most of our trucks run on diesel. In addition, approximately 90 percent of the 500,000 school buses in the United States run on diesel. Unfortunately, this is only just the beginning. The war in the Middle East is not going to end any time soon, and neither is the war in Ukraine. In fact, I am convinced that a lot more war is ahead of us.
Normally, gasoline prices are trending downward as the summer comes to an end.
But that hasn’t happened this year.
In fact, the average price of a gallon of gasoline is above four dollars on Labor Day weekend for the very first time in U.S. history…
American motorists are buying $4 gas on Labor Day weekend for the first time in history, a fuel analyst reports.
A gallon of regular unleaded gas cost an average of $4.15 nationwide on Sept. 6, AAA reports.
There have been moments when the price of gasoline has been higher than this, but it has never been this high so late in the calendar year…
“Gasoline, while not at all-time records, is at its highest level ever recorded this late in the calendar year,” said GasBuddy analyst Patrick De Haan, writing in a recent post on X.
We are experiencing the consequences of the historic events that are taking place on the other side of the planet.
The war in the Middle East has greatly reduced the flow of oil out of the Middle East, and Ukraine’s relentless attacks on Russian refineries are having an enormous impact on global energy markets.
As a result, we are forced to pay much more for gasoline…
In a normal year, gas prices follow a seasonal cycle, bottoming out in the depth of winter, when people drive less, and rising steadily through spring and summer, when temperatures are warmer, days are longer and Americans drive more.
But this is not a normal year. The Iran war has driven up global oil prices for months. On top of that, Russia has lost capacity in its refineries, De Haan said, amid ongoing attacks in its war with Ukraine. Together, those forces have pushed U.S. gas prices to their highest levels on record for this time of year.
What is happening to diesel prices is an even bigger story.
On Friday, the average price of a gallon of diesel in the United States set a brand new record high…
The national average price for a gallon of diesel now sits at $5.85, according to the AAA motor club. That figure represents a 55 percent jump since the start of the war with Iran, and the price for a gallon of diesel has now overtaken the previous peak, which occurred four years ago following Russia’s invasion of Ukraine.
Then on Saturday, the average price of a gallon of diesel went even higher…
Diesel fuel prices set a new record high Saturday for a second day in a row.
The national retail average for a gallon of diesel reached $5.8819 Saturday, according to AAA’s daily fuel prices report. That’s up from $5.85 on Friday.
This is not good at all, and the situation is particularly dire on the west coast.
In California, the average price of a gallon of diesel has nearly reached eight dollars…
The most expensive state to buy diesel fuel is California, where a gallon on Saturday averages $7.7770. Prices have not exceeded $7 per gallon in any other state, but six other states have per-gallon averages above $6: Hawaii, Washington, Nevada, Oregon, Pennsylvania and Alaska.
Russia is normally the second largest exporter of diesel fuel in the entire world.
But thanks to months of Ukrainian drone strikes, that is no longer true.
So now global inventories of diesel fuel are starting to get “very, very, very tight”…
“Normally we’d be building up a lot of diesel inventory this time of year, and then we’d draw that back down in October and November. We’re not seeing that inventory build, so folks are looking out and saying ‘wow, inventories are going to be very, very, very tight,’” Miller said.
Miller said the capacity taken offline in Russia could make it a long road to return the average cost of diesel to under $4 a gallon.
“Diesel’s not going below $4 a gallon, oh for a very long time, if possibly ever again,” Miller said.
It would be extremely difficult for me to overstate the seriousness of this crisis.
The crack spread for diesel has skyrocketed to levels that were once believed to be unthinkable…
Diesel is used to produce the food that you eat every single day.
This year, much higher diesel prices are hitting our farmers like a sledgehammer…
Dale Hemminger runs a dairy and cabbage farm in Seneca Castle, N.Y. “Diesel is our fuel,” he says. “We have to run tractors and harvesters and trucks, and they almost exclusively run on diesel. So, diesel and the price of diesel is a major factor.”
So far this year, Hemminger says, fuel has cost him close to $45,000 for a tank of 10,000 gallons. Last year, it was around $25,000 for a tank.
This is one of the reasons why many are forecasting that you will be paying significantly more for food in 2027.
Of course the cost of diesel is going to affect prices in nearly every other sector of our economy as well…
Soaring diesel costs are raising expenses for trucking, construction, agriculture and other industries that rely on heavy-duty vehicles and machinery.
High diesel prices can stoke inflation by raising the cost of transporting goods across the U.S., thereby pushing up consumer prices.
“The everyday consumer will see higher diesel prices in the consumer goods they purchase,” said Susan Bell, senior vice president of downstream research at Rystad Energy. “Think of the groceries that get shipped around the nation, and fruits and vegetables that come from California and move by truck or rail. It’s inflationary.”
Many pundits are hoping that the war in the Middle East and the war in Ukraine will both end within the next 12 months.
Wouldn’t that be wonderful?
But do you think that will actually happen?
In fact, I believe that the military conflicts that we are witnessing will only intensify as we roll into 2027.
So don’t get too accustomed to the painfully high energy prices that we are experiencing now, because I believe that they will soon go even higher.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
