NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high as limited refined-product supplies continued to exert upward pressure on fuel markets across the United States and Europe. U.S. ultra-low sulfur diesel futures surged by 7.4% on Monday, closing at $4.19 a gallon, marking the largest single-day increase since July 13. Early trading on Wednesday pushed the contract close to $4.28 per gallon, while diesel refining margins in Europe remained at record-high levels after nearly a 10% rise on Monday.
In the U.S., the average retail diesel price was $5.257 a gallon on August 10, down slightly from $5.348 a week earlier but still significantly above the $4.578 average recorded on July 6. According to the U.S. Energy Information Administration, distillate inventories declined by 3.5 million barrels in the week ending July 31, dropping to 107.2 million barrels from 110.6 million a week prior. This stock level is 5.1% below the same period last year and 16.1% under the amount recorded two years ago.
European countries also face elevated costs for converting crude oil into diesel. The premium for European low-sulfur gasoil over crude hit a record $74.66 per barrel on July 30. Diesel margins in Europe climbed 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. Its analysis indicated that refining margins contributed approximately €0.35 per litre during the first three weeks of that month, a sharp increase compared to earlier levels.
Refinery Outages Reduce Diesel Availability
Disruptions at refineries have further diminished the supply of fuel from an already tight international market. A recent attack targeted a refinery in Russia’s Tatarstan region, compounding the decline in Russian refining activity. Additionally, Saudi Arabia’s Jazan refinery has been offline since July 27 following an earlier attack. These disruptions impact key regions that usually supply large volumes of refined petroleum products globally. During June, worldwide refinery activity was already well below last year’s levels, with several major centers operating with reduced throughput.
Russia has also extended restrictions on diesel exports to the international market through January 31, 2027, further limiting availability. Meanwhile, Middle Eastern product shipments have faced additional complications due to 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 volume of petroleum products entering global markets during this period of high refining margins.
Market for Diesel Tightens Despite Elevated Refining Activity
U.S. refineries have processed substantial amounts of crude oil, yet domestic fuel inventories continue to be at low levels. Federal data show that crude input to U.S. refineries during the first seven months of 2026 reached their highest point since 2019. Refinery utilization rates have remained high, supported by robust margins that encourage processing. Nonetheless, distillate inventories as of early August are at their lowest for this time of year in nearly thirty years. Diesel and heating oil are the primary components of the distillate category tracked weekly in U.S. petroleum statistics.
Crude oil prices also advanced on Wednesday, with Brent crude near $89.81 a barrel and U.S. West Texas Intermediate close to $84.08. The diesel market has faced increased strain as the available supply of refined fuel tightens due to ongoing refinery disruptions and export restrictions. Diesel remains a vital fuel for trucking, agriculture, construction, manufacturing, and numerous other commercial sectors. The combination of shrinking U.S. inventories, record-high European refining margins, and diminished international refinery output has kept the refined-product markets strained on both sides of the Atlantic.