NEW YORK / RankWire.AI / – On Wednesday, diesel prices continued to stay high as constrained refined-product supplies exerted upward pressure on fuel markets across the United States and Europe. U.S. ultra-low sulfur diesel futures surged by 7.4% on Monday, closing at $4.19 per gallon and marking the largest single-day increase since July 13, with early Wednesday trading pushing the contract close to $4.28 per gallon. Meanwhile, European diesel refining margins persisted at historically elevated levels after nearly a 10% increase on Monday.
In the United States, retail diesel averaged $5.257 per gallon on August 10, compared to $5.348 the previous week, remaining significantly above the $4.578 average recorded on July 6. According to the U.S. Energy Information Administration, distillate inventories declined by 3.5 million barrels in the week ending July 31, falling to 107.2 million barrels from 110.6 million a week earlier. This total was 5.1% lower than the same period last year and 16.1% below the levels recorded two years prior.
Europe has similarly experienced unusually high costs in converting crude oil into diesel, with the premium for European low-sulfur gasoil over crude reaching a record of $74.66 per barrel on July 30. European diesel margins then climbed nearly 10% on August 10, with the European Central Bank reporting diesel pump prices around €1.98 per litre in the third week of July. Their analysis indicated that refining margins contributed approximately €0.35 per litre during the first three weeks of July, a sharp increase from previous levels.
Refinery disruptions lead to diminished diesel supplies
Disruptions at refineries have further reduced the supply of fuel from an already tight global market, with an attack on a refinery in Russia’s Tatarstan region adding to the decline in Russian refining activity. The Jazan refinery in Saudi Arabia has also remained offline since July 27 following an earlier attack. These disruptions impact regions that typically supply substantial volumes of refined petroleum products to international markets. As a result, global refinery throughput had already fallen significantly below the levels seen in the same period last year during June, with several major centers operating at reduced capacity.
Russia has extended restrictions on diesel exports, along with gasoline, through January 31, 2027. Additionally, shipments of Middle East products have faced further setbacks due to sharply decreased vessel movements through the Strait of Hormuz, where traffic has dropped well below pre-conflict levels. China’s reduced refining activity has also contributed to limited volumes of petroleum products entering the global markets during a period marked by high refining margins.
Despite high refining activity, the diesel market continues to tighten
U.S. refineries have processed substantial amounts of crude oil, yet domestic fuel inventories remain at low levels, with federal energy data showing that crude input to U.S. refineries during the first seven months of 2026 reached their highest since 2019. Refinery utilization rates have stayed high supported by strong margins, but even with this activity, distillate inventories at the start of August were at their lowest for this time of year in nearly three decades. Diesel and heating oil are included in the weekly U.S. petroleum statistics under the distillate inventory category.
Crude oil prices also increased on Wednesday, with Brent trading near $89.81 a barrel and U.S. West Texas Intermediate around $84.08. The diesel market has experienced intensified pressure as the available supply of finished fuel tightens amid ongoing refinery disruptions and export limitations. Diesel remains a vital fuel for trucking, agriculture, construction, manufacturing, and various other commercial sectors. The combination of low U.S. inventories, record-high European refining margins, and diminished international refinery output has sustained tightness in refined-product markets across both sides of the Atlantic.