Gregory D. DeYong is an associate professor of operations management in SIU Carbondale’s College of Business and Analytics. (Photo by Russell Bailey)
September 18, 2026
SIU professor: Diesel fuel, heating oil prices could continue climb without geopolitical changes
CARBONDALE, Ill. — While gasoline prices might experience the seasonal fall drop, the prices paid at the pump for diesel fuel and home heating oil could continue to climb if there are no geopolitical changes, said Gregory D. DeYong, an associate professor of operations management in SIU Carbondale’s College of Business and Analytics.
The rising costs are leaving retailers and consumers already feeling the pain in low-margin, fast-moving items such as produce and meat, said DeYong, who is also director of the university’s Pontikes Center for Advanced Analytics and Artificial Intelligence.
Even though the United States is a net exporter of diesel fuel — generally more than 1 million barrels per day —disruptions in the global market have driven the price increase, he said. Because of the global market for petroleum products, what happens far away still impacts U.S. consumers.
“Because so much of transportation utilizes diesel, higher prices for fuel translate to higher consumer prices fairly quickly,” DeYong said. “Diesel is also widely used in extraction industries such as mining and farming, so the effects can start at the beginning of the supply chain.”
Media availability
Gregory D DeYong has personal experience as well as professional knowledge in supply chain management. Before becoming an SIU faculty member, he worked as an import/export manager where he was responsible for about $100 million in products annually. DeYong can be reached at gdeyong@siu.edu.
As diesel climbed past $6.28 per gallon this week, regular gasoline stayed relatively steady at around $4.32 per gallon. This price difference, DeYong said, contributes to confusion in the business community and logistics sector. He explained that on-highway diesel prices are pushing freight surcharges up to between 67- to 85-cents per mile, matching the peak 2022 energy crisis levels.
“The 2026 freight market is navigating a completely different beast than in 2022,” said DeYong, who is working to establish a Center for Supply Chain Management and Logistics within the college. “Domestic refineries are running at near-maximum 98% capacity, meaning U.S. infrastructure is maxed out and cannot simply refine our way out of a 4-million-barrel global deficit.”
No margin for cushion
DeYong said the “margin compression trap” that existed in 2022, where retail truck stops essentially absorbed some of the price increases and only implemented the full cost over time, has now collapsed in 2026.
“We’re even seeing rare wholesale-to-retail inversions, where the retail price is lower than the wholesale price,” he said. “Retailers are passing hikes to truck fleets almost instantly because there is no margin cushion, leaving logistics managers zero lead time to adjust budgets.”
DeYong said several factors are playing into rising diesel costs:
- The global crude oil deficit is based on two factors: drone attacks on Russian refineries in the war between Ukraine and Russia, coupled with the shipping paralysis in the Red Sea and Strait of Hormuz in the war with Iran.
- Refining physics where 45-50% of a crude barrel automatically becomes gasoline, while roughly 25% becomes diesel fuel or petroleum distillate. Those ratios, DeYong said, “are nearly impossible to change.”
- A diesel-heating oil connection and winter outlook. Diesel fuel and ultra-low sulfur heating oil used extensively in the northeast United States are essentially the same petroleum distillate product.
“As cooler fall and winter weather approaches, commercial trucking, agricultural harvesting and residential heating oil demand will compete directly for the same constrained distillate supply,” he said. “The current freight cost crisis may expand into a widespread consumer burden for millions of households in the Northeast and Midwest relying on heating oil as temperatures drop.”
DeYong said he believes gasoline prices could likely drop as motorists are out of the summer driving season, but again, a positive political breakthrough “would lead to a pretty fast decrease.”
While a 2026 agreement between the United States and Venezuela provides access to that country’s oil reserves, DeYong doesn’t believe the added reserves will help the U.S. “in the short term, although Venezuelan oil is heavier, so it could be refined to produce more heavy products like diesel. Unfortunately, their refining infrastructure is as dilapidated as their wells,” he said.