A fight over Russian oil refineries is suddenly reaching far beyond the battlefield. U.S. President Donald Trump has urged Ukrainian President Volodymyr Zelenskiy to stop attacking Russian diesel infrastructure, arguing that the strikes are worsening a fuel shortage that is hurting economies around the world. The warning lands at an uncomfortable moment for Canada, where trucking companies are already dealing with sharply higher diesel costs and freight rates.
Yet the pressure cannot be traced to Russia alone. Disrupted Gulf exports, constrained refining capacity and depleted inventories are tightening diesel markets at the same time. For Canadian businesses that depend on trucks to move groceries, construction materials, manufactured goods and online orders, another sustained jump in diesel could quickly show up in transportation bills and, eventually, consumer prices.
What Trump Actually Told Zelenskiy
Speaking to reporters in Ireland on September 13, Trump singled out Ukraine’s campaign against Russian fuel infrastructure. He said Zelenskiy needed to stop “knocking out diesel fuel in Russia,” arguing that there were other military targets Ukraine could pursue. Trump also said the issue had been raised directly with Zelenskiy. His intervention was notable because Washington has generally supported Ukraine while simultaneously trying to contain the economic consequences of a war that has increasingly spilled into energy markets.
The immediate concern is not simply the loss of Russian crude oil. Ukrainian long-range drones have repeatedly targeted refineries and other infrastructure that turn crude into usable products such as diesel and gasoline. That distinction matters. A world with sufficient crude can still suffer a diesel shortage when refineries are damaged, exports are restricted or transportation routes are disrupted. Trump placed most of the blame on the Russia-Ukraine conflict, although broader energy-market evidence shows that events in the Middle East are also playing a major role.
Ukraine’s Refinery Campaign Is Taking Russian Fuel Off the Market
Ukraine has increasingly targeted Russian refineries, storage sites and fuel infrastructure as part of its effort to weaken Moscow’s ability to finance and supply its military campaign. Kyiv argues that energy installations supporting Russia’s war effort are legitimate military targets, particularly as Ukraine itself continues to face Russian attacks on power and energy infrastructure. Recent strikes have forced some Russian refineries to reduce or temporarily halt operations, including facilities capable of processing large volumes of crude each day.
Russia has responded partly by protecting its domestic market. Moscow extended restrictions on diesel exports through September 30 after shortages and refinery outages tightened supplies at home. Russia is normally one of the world’s largest diesel exporters, so removing even part of those barrels from international trade matters well beyond Russian filling stations. The effect is especially significant because diesel markets were already under stress. When a major supplier stops exporting at the same moment other producing regions are struggling, buyers begin competing for a smaller pool of available fuel.
The Global Diesel Squeeze Is Bigger Than Russia and Ukraine
Trump disputed the idea that the Middle East was principally responsible for the diesel shortage, but International Energy Agency data point to a more complicated picture. The IEA estimates that Gulf diesel and gasoil exports have collapsed amid conflict and shipping disruptions. In August, net Gulf diesel and gasoil exports averaged about 390,000 barrels per day, only a little more than one-quarter of their pre-war level. Russian refining disruptions then compounded those losses rather than creating the shortage in isolation.
Together, Russia and Gulf producers supplied close to 45% of global seaborne diesel and gasoil trade before the latest disruptions. By August, their combined net exports were roughly 1.6 million barrels per day below February levels. That is a substantial hole for other refiners to fill quickly. The IEA says facilities elsewhere have pushed throughput higher to capture extraordinary refining margins, but available capacity has limits. Diesel therefore illustrates why crude-oil headlines alone can be misleading: the bottleneck increasingly sits inside refineries and product-export networks rather than solely at oil wells.
Diesel Has Become the Pressure Point in the Energy Market
Diesel occupies an unusually important place in the economy. It powers heavy trucks, agricultural machinery and significant portions of rail, marine and industrial activity. The IEA estimates diesel and gasoil account for nearly 30% of global oil demand. In early September, U.S. diesel values on a barrel basis climbed above US$200, roughly 94% above pre-war levels, while European and Asian markets were also under severe pressure. U.S. retail diesel subsequently crossed US$6 a gallon on average for the first time.
That creates a very different economic problem from a gasoline spike affecting household driving. Diesel is embedded in the cost of producing and transporting goods. A refrigerated trailer hauling food, a dump truck moving aggregate and a tractor transporting grain cannot simply stop operating because the price has risen. Operators may reduce unnecessary mileage or improve routing, but most commercial demand is tied to work that still has to be completed. That makes diesel inflation particularly capable of moving through supply chains.
Canadian Trucking Costs Were Rising Before Trump’s Warning
Canada is not entering this shock from a comfortable starting point. Statistics Canada reported that prices for truck transportation in the second quarter of 2026 were 9.5% higher than a year earlier and 5.3% above the first quarter. That quarterly increase was the largest since the second quarter of 2022, shortly after Russia’s full-scale invasion of Ukraine sent energy markets sharply higher. Both local and long-distance trucking services recorded increases, illustrating how broadly fuel and other operating pressures were being felt.
Diesel costs have moved even more dramatically. Statistics Canada found that prices paid to producers for diesel were between 40.3% and 58.8% higher in July than a year earlier, depending on the Canadian region. Energy was also the most frequently cited input-cost concern among transportation and warehousing businesses facing cost obstacles. Canada had more than 155,000 business locations in the truck-transportation subsector as of June, meaning a sustained diesel shock reaches thousands of carriers ranging from large fleets to small family-owned operations.
Fuel Surcharges Can Pass the Increase Along Quickly
The freight industry has mechanisms designed specifically for periods like this. Rather than renegotiating an entire transportation contract every time diesel moves, carriers frequently apply fuel surcharges tied to published diesel benchmarks. Those formulas can change weekly, meaning an international fuel disruption can work its way into a Canadian shipping invoice surprisingly quickly. The surcharge protects carriers from absorbing the entire increase, but it transfers part of that cost to manufacturers, wholesalers, retailers and other businesses purchasing transportation.
Recent Canadian schedules show the scale involved. FedEx Freight listed intra-Canada fuel surcharges of 50% for less-than-truckload shipments and 71.5% for truckload shipments for the week ending September 13, calculated from a Canadian diesel benchmark. CN’s intermodal fuel formula also increased for the week beginning September 14, with its intra-Canada percentage-based surcharge reaching 38.11%. The percentages do not mean fuel represents that share of the total final product price; they are adjustments to specified freight charges. They nevertheless demonstrate how high diesel benchmarks are already flowing directly into logistics pricing.
Smaller Carriers Can Feel the Pain Before Customers Do
Large transportation companies may have sophisticated hedging programs, fuel contracts and automated surcharge systems. Smaller fleets and independent operators often have less financial flexibility. A tractor can consume hundreds of litres over a long-haul trip, so even a relatively modest increase per litre can create a sizeable cash expense before the carrier receives payment from a customer. When diesel climbs rapidly, there can also be a timing mismatch between what the operator pays at the pump and when a revised surcharge becomes recoverable.
That is why fuel volatility can be as damaging as the absolute price. A stable high price can eventually be built into rates; a rapidly changing one complicates quoting, budgeting and cash flow. Industry groups have warned that smaller Canadian operators are especially exposed because diesel has risen while equipment, insurance and other operating costs remain elevated. Statistics Canada’s broader business data reinforce the concern: transportation and warehousing companies continue to identify input costs as a significant obstacle, creating pressure to either raise prices, accept thinner margins or find operational savings elsewhere.
Canada Produces Oil but Still Depends on Refined-Fuel Trade
Canada’s position can seem counterintuitive. It is one of the world’s major crude-oil producers, yet domestic motorists and trucking companies are not insulated from global refined-product shortages. Crude must first be processed into diesel, gasoline, jet fuel and other products, and refinery geography does not perfectly match where Canadian demand is located. Regional markets therefore rely on pipelines, marine shipments and cross-border trade to balance supply.
Canada imported about 485,000 barrels per day of refined petroleum products in 2025, according to the Canada Energy Regulator, an increase of 3% from the previous year. Nearly 80% came from the United States. Quebec, Ontario and British Columbia import substantial quantities of transportation fuels, even as Canada also exports refined products from other regions. This interconnected system means diesel prices can respond to U.S. refinery margins and global product shortages even when Canadian crude production is strong. Producing abundant raw oil does not automatically guarantee cheap diesel in every province.
Higher Freight Bills Can Reach Far Beyond Trucking Companies
The importance of trucking to Canadian prices extends well beyond transportation firms themselves. Statistics Canada’s experimental Supply Chain Services Price Index gives truck transportation a 61% weight among the freight modes it tracks, much more than rail, air or water transportation. The reason is familiar to almost every supply chain: regardless of whether a product spends part of its journey on a train or ship, a truck often handles at least one segment between a warehouse, factory, port, store or customer.
Statistics Canada has already observed businesses preparing for that pass-through. In its second-quarter survey, 23.2% of transportation and warehousing businesses expected to increase their prices during the next three months. Retailers, wholesalers, restaurants and other transportation-dependent sectors were also reporting plans for price increases. Diesel is never the only reason consumer prices change—wages, rents, exchange rates, tariffs and commodity prices all matter—but prolonged freight inflation adds another layer. A few dollars added to one shipment may seem small until that cost is repeated across thousands of loads.
The Biggest Question Is How Long the Shortage Lasts
For Canadian trucking companies, the crucial variable is duration. A short-lived price spike can be managed through surcharges, route optimization and temporary cost controls. A shortage lasting through winter would be harder. Energy executives interviewed by Reuters expect global diesel supplies to remain tight as refinery disruptions in Russia and the Middle East collide with seasonal demand and limited spare processing capacity. The IEA has also pushed a full recovery in Middle Eastern oil supply into 2027, while global inventories have fallen sharply since February.
Ottawa has already provided one cushion. The federal government extended its temporary suspension of the diesel excise tax through January 31, 2027, keeping four cents per litre off the federal levy. Half the normal tax is scheduled to return in February and March before the full rate resumes in April. That relief cannot replace missing global diesel barrels, but it softens part of the domestic cost. Ultimately, Canadian trucking costs will depend on whether refinery output recovers, Russian exports return, Gulf shipping conditions improve and crude and diesel inventories stop shrinking.
