DENVER, COLO. (RFD NEWS) — Rising fuel and energy costs are expected to have a greater economic impact on rural America, where agriculture and transportation rely heavily on diesel and long-distance travel. A new CoBank report warns that global energy disruptions could push costs higher across farm operations and rural communities.
Despite strong overall economic performance, volatility in oil markets tied to the Middle East conflict is driving higher fuel prices. U.S. diesel and gasoline costs are closely linked to global markets, meaning disruptions abroad quickly affect domestic prices.
Rural areas face greater exposure. Longer travel distances, limited transportation options, and reliance on fuel-intensive industries such as farming and freight increase vulnerability. Higher diesel costs also raise the price of moving goods, adding pressure to both farm inputs and consumer prices.
For agriculture, the impact is immediate. Fuel and fertilizer costs have risen sharply, with some estimates showing increases of 20 percent to 40 percent since the conflict began. These higher costs are expected to push breakeven levels higher and strain margins.
Rising energy costs are raising concerns for rural communities, with a new report highlighting how higher fuel prices can hit rural areas especially hard due to structural and logistical factors.
CoBank Lead Energy Economist Teri Viswanath joined us on Wednesday’s Market Day Report to break down the dynamics behind current energy market pressures.
In her interview with RFD NEWS, Viswanath discussed why the United States, despite being the world’s largest oil producer, remains exposed to global oil market shocks and why achieving true energy independence remains difficult. She also addressed whether expanding domestic refinery capacity—including the announcement of a new U.S. oil refinery in nearly 50 years—could strengthen long-term energy stability.
Viswanath further explained why rural communities are disproportionately affected by higher fuel prices than urban and suburban areas, citing differences in transportation needs and infrastructure.
Finally, she discussed whether recent geopolitical tensions involving Iran are likely to create short-term volatility or longer-lasting impacts on U.S. gas and diesel prices.
