NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high as the tightening of refined-product supplies exerted continued pressure on fuel markets across the United States and Europe. U.S. 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 trading on Wednesday pushed the contract close to $4.28 per gallon, while European diesel refining margins stayed at historic highs after nearly a 10% rise on Monday.
As of August 10, U.S. retail diesel averaged $5.257 a gallon, compared to $5.348 a week prior, remaining significantly above the $4.578 average recorded on July 6. The U.S. Energy Information Administration indicated that distillate stocks decreased by 3.5 million barrels during the week ending July 31, with inventories dropping to 107.2 million barrels from 110.6 million a week earlier. This figure is 5.1% lower than a year earlier and 16.1% below the level from two years prior.
Europe has also experienced unusually high costs in converting crude oil into diesel. The premium for European low-sulfur gasoil over crude oil hit a record $74.66 a barrel on July 30. Meanwhile, diesel refining margins in Europe increased nearly 10% on August 10. The European Central Bank reported that diesel pump prices hovered around €1.98 per litre in the third week of July, with refining margins during the first three weeks contributing approximately €0.35 per litre—a notable rise from previous levels.
Refinery disruptions limit diesel supply availability
Disruptions at refineries have further reduced fuel output in an already strained global market. An attack targeted a refinery in Russia’s Tatarstan region, compounding the decline in Russian refining activity. Additionally, Saudi Arabia’s Jazan refinery has 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. During June, global refinery runs had already fallen significantly below the levels of the previous year, with several key refining centers operating at reduced throughput.
Russia has extended restrictions on its diesel exports through January 31, 2027, further limiting the global supply for international trade. Disruptions have also affected Middle East shipments, which face challenges from sharply reduced vessel traffic through the Strait of Hormuz. Traffic in this crucial waterway has fallen well below pre-conflict levels. Meanwhile, China’s decreased refining activity has further limited the flow of petroleum products into global markets during a period of high refining margins.
Refining activity remains high, but diesel supplies stay tight
Despite significant crude processing by U.S. refiners, domestic fuel inventories continue to be low. Data from the federal energy authorities show that crude inputs to U.S. refineries during the first seven months of 2026 reached their highest point since 2019. Operating at high utilization rates supported by strong margins, refineries continue processing heavily. Nonetheless, distillate inventories at the start of August are at their lowest for this time of year in roughly thirty years. Diesel and heating oil are included in the distillate inventory figures tracked weekly by U.S. petroleum statistics.
Crude oil prices also moved upward on Wednesday, with Brent near $89.81 a barrel and U.S. West Texas Intermediate close to $84.08. The diesel markets have experienced increased pressure as refined supply tightens amid ongoing refinery disruptions and export restrictions. Diesel remains a vital fuel for trucking, agriculture, construction, manufacturing, and various other commercial sectors. The combination of dwindling U.S. inventories, record-high European refining margins, and reduced international refinery output has resulted in tight refined-product markets across both sides of the Atlantic.