Diesel Prices Just Dropped Below A Key Threshold. Easing Geopolitical Tensions Are Partly Responsible.

The nationwide average diesel price dropped below $6 a gallon for the first time in two months on Saturday.

The price dropped to $5.998 on November 14, Reuters reported, having initially surged above $6 on September 10 before hitting record-breaking highs of $6.519 on September 22. However, the Reuters report cites the ​fuel price tracker GasBuddy, whereas the AAA tracker puts Saturday's average diesel price at $6.0366 and Sunday's at $6.0198.

Nevertheless, both measures show that the cost of diesel is indeed plummeting, a phenomenon that has coincided with a cooling of global geopolitical tensions and followed a series of measures the White House has implemented to drive down diesel costs.

Diesel prices are closely linked to oil prices, which have dropped significantly since the Democrats won the midterm elections, which boosted hopes for a peace deal between Washington and Tehran and the prospect of a Strait of Hormuz fully reopened to commercial shipping.

Brent Crude, the international benchmark, settled at around $96 per barrel on Friday, a markedly lower level than the roughly $104 it was trading at by the end of election day and a far cry from its late October peak of around $118.

Nevertheless, domestic factors have also played a role in driving diesel down: President Donald Trump signed an executive order in early October expanding access to tax-exempt red-dyed diesel and reached a deal with the Kremlin which saw Moscow release diesel to the global and American markets in exchange for a suspension of its sanctions on the importation of the commodity.

Trump also helped negotiate the release of 100 million barrels of oil and diesel stocks from the G7 countries at the beginning of October.

Seasonal conditions are also at play: experts cite fewer people driving in autumn, hurricane season winding down in November - which reduces refinery disruptions on the hurricane-prone Gulf Coast - and the completion of refinery maintenance this month as reasons for prices easing.

Gas prices are also dropping: the AAA tracker estimates Sunday's national average as $3.8242 per gallon, a significant decrease compared to the average a month ago, which was $4.3344.

Nevertheless, fuel costs remain much higher than they were before the U.S. and Israel went to war with Iran in February. On the day (February 28) that the Iran war began, the average gallon of gas cost $2.98, whereas the price of diesel was $3.75 per gallon.

High domestic prices were a key factor in the opposition Democrats winning a landslide victory over the incumbent GOP in the recent midterms, and pressure on the Trump administration to address the factors keeping prices high - particularly the Iran war - will likely ramp up significantly come the beginning of the new term of Congress in January.