NEW YORK / RankWire.AI / – Across the United States and Europe, diesel prices have maintained high levels due to limited inventories and refinery disruptions restricting the availability of finished fuel. U.S. ultra-low sulfur diesel futures surged 7.4% on Monday to reach $4.19 a gallon, marking the biggest daily increase since July 13. Early Wednesday, the contract traded close to $4.28 a gallon. Meanwhile, European diesel refining margins continued to be notably strong, having gained nearly 10% at the start of the week.
Diesel stockpiles in the U.S. have dwindled to levels rarely seen during the summer months. According to the U.S. Energy Information Administration, the weekly distillate stockpiles on July 31 amounted to 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 comparable data in 2024. Since distillate stocks include diesel and heating oil, they serve as crucial indicators of fuel availability.
In addition to wholesale prices, retail diesel costs have remained significantly higher than earlier in the summer. The nationwide average in the U.S. hit $5.257 a gallon on August 10, slightly down from $5.348 the previous week. Back on July 6, prices averaged $4.578 a gallon. Europe faces similar pressures due to rising refining costs. The premium for low-sulfur gasoil over crude hit a record $74.66 a barrel on July 30, emphasizing the extraordinary value attributed to finished diesel supplies during this period.
Refinery shutdowns intensify fuel supply challenges
The market’s tightness has been worsened by supply disruptions resulting from several major refining centers operating below normal capacity. A refinery in Russia’s Tatarstan region was damaged in an attack, further reducing Russian processing capacity. Additionally, Saudi Arabia’s Jazan refinery has been offline since July 27 after an earlier attack, removing another significant source of refined products from international markets. During June, global refinery runs were already well below the levels seen a year earlier, as multiple regions reported decreased processing activity.
Export restrictions have further exacerbated the situation. Russia extended restrictions on gasoline and diesel exports through January 31, 2027. Meanwhile, vessel traffic from the Middle East through the Strait of Hormuz has decreased. China’s domestic refinery activity has weakened, leading to less refined fuel being supplied globally. In Europe, the European Central Bank noted that diesel pump prices approached €1.98 per litre during the third week of July as refining margins surged sharply.
Persistent low inventories sustain pressure on diesel markets
Despite high crude processing levels at U.S. refineries, diesel stocks continue to remain constrained. Crude inputs in the first seven months of 2026 reached their highest point since 2019 for that period. However, high refinery utilization has failed to restore distillate inventories to typical seasonal levels, which have entered August at their lowest point in approximately thirty years. This scarcity makes the U.S. fuel market highly sensitive to fluctuations in refinery output and international product flows.
Crude oil prices increased again on Wednesday, with Brent near $89.81 a barrel and West Texas Intermediate around $84.08. Because finished-product supplies are still limited across key markets, diesel has experienced particularly strong price pressure. This fuel is vital for sectors such as trucking, agriculture, construction, and manufacturing. The combination of low inventories in the U.S., elevated refining margins in Europe, refinery outages, and export restrictions continue to exert upward pressure on diesel prices on both sides of the Atlantic.