Diesel hits US record $6.527 a gallon as crude slides on Iran diplomatic hopes

Thor reports margin pressure; analysts flag similar risks for Volvo Car

The U.S. national average for diesel rose to a fresh record of $6.527 a gallon Tuesday, according to the American Automobile Association, up sharply from $3.688 a year ago. The milestone came as global crude benchmarks fell on diplomatic hopes, with Brent slipping below $100 a barrel after Japan’s Kyodo News reported that Iran has proposed to reopen the Strait of Hormuz within seven days if the American blockade is lifted.

The diesel-crude divergence reflects refining constraints now rippling through global energy and transport markets, with separate analyst notes on Tuesday warning of mounting cost pressures across the auto sector from tariffs, currency moves and weakening retail demand.

Russia is set to extend a ban on most diesel exports that was introduced earlier this year due to continued Ukrainian attacks on its refineries, according to a Bloomberg report. Curtailed Russian exports and prolonged disruptions to crude flows through the Strait of Hormuz have squeezed global supplies. “The diesel market is likely to face a challenging winter if the situation in the Middle East does not ease and Russia’s ban on diesel exports remains in place for even longer,” Carsten Fritsch of Commerzbank said.

Brent was down 1.2% at $99.11 a barrel, while the U.S. benchmark West Texas Intermediate fell 2.7% to $93.20. “The report triggered fresh selling, as traders read it as a fresh de-escalation signal ahead of this week’s U.N. General Assembly,” Kaynat Chainwala of Kotak Securities said. She added: “Until a concrete outcome emerges from this week’s meetings, crude’s risk premium looks vulnerable to further unwinding, though stalled talks could just as quickly reverse the move.”

RV maker Thor Industries reported that its largest suppliers have passed on rising input costs tied to tariffs and broader inflationary pressures. The company said it had chosen not to pass the full burden to its independent dealers and retail customers amid affordability constraints. “Due to the challenged retail market and affordability challenges facing RV customers, we have so far made a deliberate choice not to pass the full burden of these rising costs on to our independent dealer partners and retail customers,” Thor said in prepared earnings remarks. “The cost of that choice is visible in our results.” The company also said it’s working to make its margins more resilient in the long-run, including by better managing production, growing its owned supply business and optimizing its organizational structure. The company also said macroeconomic strains continue to weigh on consumers, with entry-level and mid-tier buyers trading down to smaller or used RVs, or staying out of the market. “The pressures on the North American RV consumer that we described last quarter still remain, and in some instances, they are becoming more pronounced with the recent interest rate increase and elevated fuel prices,” Thor added. Across Europe, Thor said, consumers are operating from a healthier financing foundation, paying a higher percentage of the purchase price in cash with less reliance on finance.

Volvo Car faces mounting headwinds into its third quarter. Citi analysts wrote that retail volumes are tracking 13% lower in the quarter to date, with pricing a headwind in China and Europe and depreciation, raw materials and product mix also negative. Visible Alpha consensus expects third-quarter sales of 81.9 billion Swedish kronor with adjusted EBIT of 349 million kronor, implying a margin of 0.4%. Citi said margins could realistically be negative given fixed-cost absorption, high raw-material headwinds and worse-than-consensus volumes. “Cost savings are likely the only positive in the quarter,” the bank said. Deutsche Bank analyst Nikita Papaccio separately wrote that the global premium market is now expected to decline more than initially anticipated, with a particularly weak outlook for China, partly offset by improving conditions in Europe. The company is seeing solid order intake for the new EX60, but the production ramp-up remains in progress, the bank added. “Regarding FY guidance, although the company already adjusted its forecasts alongside Q2 results, we expect a further softening in light of recent developments,” Papaccio said. Citi maintains a sell rating with a 16 kronor target price; Deutsche Bank holds with a 21 kronor target. Shares closed Monday at 16.88 kronor before falling 1.3% to 16.66 kronor.

AutoZone shares rose 1.3% premarket despite the auto-parts retailer reporting fiscal fourth-quarter same-store sales that missed Wall Street estimates. Mizuho analyst David Bellinger said an 8.6% sales increase in its domestic commercial business implies slightly negative same-store sales for its core do-it-yourself segment, also noting that operating expenses were elevated but offset by tariff refunds. “We question shares initially up on this print,” Bellinger said.

Uber’s plan to acquire Delivery Hero remains a key overhang for Grab’s share price, according to DBS Group Research analyst Sachin Mittal. The deal would bring Foodpanda’s Southeast Asian operations under Uber’s umbrella, in conflict with its noncompete agreement with Grab. Uber would need to fully divest its 13.5% stake in Grab, which “makes little strategic sense” given Foodpanda’s much smaller regional footprint and likely lower strategic value, Mittal said. He noted that the deal might not secure regulatory approval if Uber does not sell its Grab stake. Conversely, an Uber threat to Grab could become real if it does divest, Mittal added. DBS retained a buy rating on Grab but cut its target price to $5.00 from $5.93; ADRs last ended at $2.91.

Looking further ahead, Bernstein analysts wrote that the commercialization of humanoid robots is approaching but mass adoption remains three to five years away. Automakers and parts suppliers remain actively engaged in humanoid robot development, the analysts said. XPeng maintains one of the most accelerated timelines among automakers, targeting mass production in early 2027 with initial deployment through dealerships and showroom applications in both China and overseas markets. BYD and other automakers are increasingly evaluating humanoid robots for manufacturing applications, where labor replacement and productivity gains could be significant.

On China auto demand, Bernstein said industry watchers generally hold a cautious view on domestic demand looking into 2027, citing consumer spending, limited policy support and the possibility of flat-to-negative year-on-year growth. Sentiment on exports remains constructive, though most expect growth to moderate following the strong expansion seen this year. Industry participants continue to expect EV penetration to reach 80% to 90% by 2030, driven by ongoing electrification and a further shift toward full EVs.

Bank of America analysts wrote separately that Uber likely has several years before robotaxis materially dent its share of the U.S. mobility market, given the ride-hailing company’s rapid growth in sparse markets. The analysts expect Waymo, Tesla and Zoox to rapidly scale production and autonomous vehicle fleets over the next three years, forecasting the three will make up 5% of Uber bookings by 2028, with true acceleration potentially coming in 2029 when Tesla could have a significant ramp in cybercab production and Uber has set a goal of being the global autonomous-vehicle trips leader by that year.