NEW YORK / RankWire.AI / – The high prices for diesel have persisted across the United States and Europe due to limited inventories and refinery disruptions, which have restricted the availability of refined fuel. On Monday, U.S. ultra-low sulfur diesel futures increased by 7.4% to reach $4.19 a gallon, marking the largest daily rise since July 13. Early Wednesday, the contract was trading close to $4.28 a gallon. Meanwhile, European diesel refining margins also stayed at historically strong levels after nearly 10% gains at the beginning of the week.
In the U.S., diesel stockpiles have dwindled to levels rarely seen during summer. According to the U.S. Energy Information Administration, the distillate stocks for the week ending 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% below the comparable level in 2024. Since distillate stocks include diesel and heating oil, they serve as a key indicator of fuel availability.
Retail prices for diesel have also stayed significantly above summer’s earlier levels. The national average in the U.S. hit $5.257 per gallon on August 10, slightly lower than the $5.348 recorded a week earlier. On July 6, prices averaged $4.578 per gallon. Europe has experienced similar upward pressure due to increased refining costs, with the premium for low-sulfur gasoil over crude reaching a record high of $74.66 a barrel on July 30, emphasizing the unusually high value assigned to finished diesel supplies.
Refinery outages intensify fuel supply concerns
Fuel markets have been further strained by supply disruptions, as multiple key refining facilities operate below their normal capacities. A refinery in Russia’s Tatarstan region suffered damage from an attack, adding to the ongoing decline in Russian processing activity. Additionally, Saudi Arabia’s Jazan refinery has remained offline since July 27 following an earlier attack, removing another source of refined products from global trade. In June, international refinery runs were already well below levels seen a year earlier, with several regions reporting lower processing volumes.
The impact of refinery outages has been amplified by export restrictions. Russia has extended limitations on gasoline and diesel shipments through January 31, 2027. Shipping activity from the Middle East has decreased as vessel traffic through the Strait of Hormuz has slowed. China’s contribution of refined fuel to world markets has also diminished due to weaker domestic refinery activity. In Europe, the European Central Bank reported diesel pump prices near €1.98 per litre during the third week of July as refining margins surged sharply.
Limited inventories sustain pressure on diesel markets
Despite high crude inputs during the first seven months of 2026, U.S. refineries have not rebuilt distillate stocks to typical seasonal levels. Crude processing reached its strongest level since 2019 for that period, yet stocks entered August at their lowest point for this time of year in about thirty years. This situation has left the U.S. fuel market particularly vulnerable to shifts in refinery output and international product flows.
Crude oil prices also climbed on Wednesday, with Brent nearing $89.81 a barrel and West Texas Intermediate around $84.08. The upward price pressure on diesel is more pronounced, given the ongoing supply constraints across key markets. Diesel remains vital for sectors such as trucking, agriculture, construction, and manufacturing. The combination of low U.S. inventories, elevated European refining margins, refinery outages, and export restrictions continues to keep diesel markets tight on both sides of the Atlantic.