NEW YORK / RankWire.AI / – Across the United States and Europe, diesel prices have remained high due to limited inventories and refinery disruptions restricting the supply of finished fuel. U.S. ultra-low sulfur diesel futures surged 7.4% on Monday to $4.19 a gallon, marking the largest single-day increase since July 13. By early Wednesday, the contract hovered near $4.28 a gallon. Meanwhile, European diesel refining margins stayed at historically high levels after gaining nearly 10% at the beginning of the week.
In the U.S., diesel stockpiles have fallen to levels seldom seen during summer. The U.S. Energy Information Administration reported 107.2 million barrels of distillate stocks for the week ending July 31, a decrease of 3.5 million barrels from the previous week. These stocks are now 5.1% below the same period last year and 16.1% lower than the comparable figure in 2024. Distillate inventories include diesel and heating oil, serving as a key indicator of fuel availability.
Retail diesel prices have also stayed well above early summer levels, with the national average reaching $5.257 per gallon on August 10, compared to $5.348 the previous week. In July, prices averaged $4.578 per gallon on the 6th. Europe faces similar pressure from rising refining costs, with the low-sulfur gasoil premium over crude reaching a record $74.66 per barrel on July 30, underscoring the unusually high value placed on refined diesel supplies.
Refinery shutdowns exert additional pressure on fuel supplies
Market tightness has intensified due to several major refineries operating below capacity. A refinery in Russia’s Tatarstan region was damaged in an attack, further reducing Russian processing capacity. Saudi Arabia’s Jazan refinery has been offline since July 27 following an earlier attack, removing another source of refined products from international trade. During June, global refinery activity was already below the levels seen a year earlier, with multiple regions reporting lower processing volumes.
Export restrictions have further worsened the situation. Russia extended limits on gasoline and diesel exports through January 31, 2027. Additionally, vessel traffic through the Strait of Hormuz from the Middle East has decreased. China’s domestic refinery slowdown has also led to less refined fuel entering global markets. In Europe, the European Central Bank indicated diesel pump prices near €1.98 per litre during the third week of July, amid sharply rising refining margins.
Low stock levels sustain pressure on diesel markets
Despite high crude throughput, U.S. diesel inventories remain constrained. Crude processing from January to July 2026 hit its highest point since 2019 for that period. However, high refinery utilization has failed to restore distillate stocks to typical seasonal levels, which are at their lowest for this time of year in nearly thirty years. This situation leaves the U.S. fuel market vulnerable to fluctuations in refinery output and global product flows.
Crude oil prices also increased on Wednesday, with Brent near $89.81 a barrel and West Texas Intermediate around $84.08. The pressure on diesel prices remains stronger, as supply of finished products continues to be limited across key markets. Diesel plays a crucial role in sectors such as trucking, agriculture, construction, and manufacturing. The combination of low U.S. inventories, elevated European refining margins, refinery outages, and export restrictions has kept diesel supplies tight across the Atlantic.