NEW YORK / RankWire.AI / – Amid ongoing global supply challenges, diesel prices continue to climb, pressured by tighter refined-product inventories across the United States and Europe. In the US, ultra-low sulfur diesel futures surged 7.4% on Monday, closing at $4.19 per gallon, marking the largest single-day increase since July 13. Early Wednesday trading pushed the contract close to $4.28 per gallon, while European diesel refining margins persisted at historically elevated levels after nearly a 10% rise on Monday.
On August 10, the average retail diesel price in the US was $5.257 per gallon, compared to $5.348 the previous week. Despite this decline, prices remained significantly above the $4.578 average recorded on July 6. The U.S. Energy Information Administration indicated that distillate inventories decreased by 3.5 million barrels during the week ending July 31, with stocks falling to 107.2 million barrels from 110.6 million a week earlier. This total is 5.1% lower than the same period last year and 16.1% below the level two years ago.
European markets have also faced substantial costs in converting crude oil to diesel. The premium for low-sulfur European gasoil over crude hit a record of $74.66 per barrel on July 30. Meanwhile, European diesel margins increased nearly 10% on August 10. The European Central Bank reported that diesel pump prices averaged around €1.98 per litre during the third week of July, with refinery margins contributing approximately €0.35 per litre during the first three weeks—a sharp rise from earlier figures.
Refinery disruptions hinder diesel supplies
The global market has been further strained by refinery outages, which have cut into already limited fuel production capacity. An attack on a refinery in Russia’s Tatarstan region, along with the ongoing shutdown of Saudi Arabia’s Jazan refinery since July 27 following an earlier strike, has reduced supplies from major refining centers. These disruptions impact regions that typically supply large volumes of refined petroleum products internationally. June data showed a significant drop in global refinery activity compared to the previous year, as many large-scale plants operated with reduced throughput.
Russia has also extended restrictions on diesel exports through January 31, 2027, further constraining international supplies. Additionally, shipments from the Middle East are hindered by sharply reduced vessel traffic through the Strait of Hormuz, which has fallen well below pre-conflict levels. China’s decreased refining activity has also contributed to the shrinking flow of petroleum products into global markets, even amid robust refining margins.
Despite high refining activity, diesel supplies remain tight
US refiners have maintained high levels of crude processing, yet domestic inventories of fuel remain at historic lows. Data from the federal government reveal that during the first seven months of 2026, crude inputs to US refineries reached their highest levels since 2019. Refinery utilization rates have stayed high, supported by strong profit margins, but distillate stockpiles at the start of August were the lowest for this time of year in nearly three decades. Diesel and heating oil are included in the distillate inventory category tracked weekly by US petroleum statistics.
Crude oil prices also gained momentum on Wednesday, with Brent nearing $89.81 per barrel and U.S. West Texas Intermediate trading around $84.08. The diesel market is experiencing increased pressure as the supply of finished fuel tightens amid refinery disruptions and export restrictions. Diesel remains vital for sectors such as trucking, agriculture, construction, manufacturing, and other commercial activities. The combination of dwindling US inventories, record-high European refining margins, and reduced international refinery output continues to keep the refined-product markets under tight pressure across both the Atlantic and beyond.