NEW YORK / RankWire.AI / – Across the US and Europe, diesel prices have remained elevated due to restricted inventories and refinery outages that limit the availability of refined fuel. On Monday, U.S. ultra-low sulfur diesel futures increased by 7.4%, reaching $4.19 per gallon, marking the largest single-day rise since July 13. By early Wednesday, the contract was trading close to $4.28 per gallon. Additionally, European diesel refining margins stayed at historically high levels after gaining nearly 10% at the start of the week.
In the United States, diesel stockpiles have fallen to levels seldom observed during summer months. The U.S. Energy Information Administration indicated that for the week ending July 31, distillate inventories stood at 107.2 million barrels, a decrease of 3.5 million barrels from the previous week. This figure is 5.1% below the same period last year and 16.1% lower than the corresponding level in 2024. Since distillates include diesel and heating oil, they serve as a crucial indicator of fuel availability.
Meanwhile, retail diesel prices continue to stay well above summer levels seen previously. On August 10, the U.S. national average reached $5.257 per gallon, compared to $5.348 a week earlier, while prices averaged $4.578 per gallon on July 6. Similarly, Europe faces upward pressure on prices driven by increased refining costs. The low-sulfur gasoil premium over crude oil hit a record $74.66 a barrel on July 30, underscoring the high value attributed to finished diesel supplies.
Refinery outages intensify fuel supply concerns
The market’s tightness has been exacerbated by outages at several key refining facilities. A refinery in Russia’s Tatarstan region suffered damage from an attack, reducing Russian processing activity. The Jazan refinery in Saudi Arabia has remained offline since July 27 following an earlier attack, eliminating another source of refined products from international markets. During June, global refinery runs were already considerably below the levels of the previous year, with numerous regions reporting decreased processing volumes.
Export restrictions have further worsened the supply situation. Russia extended restrictions on gasoline and diesel shipments through January 31, 2027. Meanwhile, vessel traffic from the Middle East through the Strait of Hormuz has diminished. China has also contributed less refined fuel to global markets as its domestic refinery capacity weakened. In Europe, the European Central Bank noted diesel pump prices near €1.98 per litre during the third week of July, as refining margins surged sharply.
Limited inventories sustain pressure on diesel markets
Despite high crude processing volumes during the first seven months of 2026, U.S. diesel stocks have remained constrained. Crude intake levels reached their highest point for that period since 2019, yet high refinery utilization has not resulted in normal seasonal stock levels. As a result, stocks at the start of August were at their lowest for this time of year in nearly thirty years. This deficit has made the U.S. fuel market particularly vulnerable to fluctuations in refinery output and global product flows.
Crude oil prices also climbed higher on Wednesday, with Brent near $89.81 per barrel and West Texas Intermediate around $84.08. The price of diesel has experienced more significant upward pressure because supplies of finished product remain tight across key markets. Diesel plays a vital role in supporting sectors such as trucking, agriculture, construction, and manufacturing. The combined effects of low U.S. inventories, elevated refining margins in Europe, refinery outages, and export restrictions have kept the diesel market tight on both sides of the Atlantic.