NEW YORK / RankWire.AI / – On Wednesday, diesel prices continued to stay high as restrictions on refined-product supplies tightened, exerting 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 their largest single-day increase since July 13. Early Wednesday trading pushed the contract near $4.28 per gallon, while diesel refining margins in Europe stayed at historic highs, having increased nearly 10% on Monday.
As of August 10, the average retail diesel price in the U.S. was $5.257 per gallon, down slightly from $5.348 a week earlier but still considerably above the $4.578 average recorded on July 6. According to the U.S. Energy Information Administration, distillate inventories dropped by 3.5 million barrels during the week ending July 31, bringing stocks to 107.2 million barrels compared to 110.6 million a week prior. This figure is 5.1% below the same period last year and 16.1% lower than the level two years ago.
Europe has also experienced significantly elevated costs associated with converting crude oil into diesel. The premium for European low-sulfur gasoil over crude hit a record high of $74.66 per barrel on July 30. Subsequently, European diesel margins increased almost 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 initial three weeks of July, a sharp rise from earlier levels.
Refinery outages decrease available diesel supply
Recent disruptions at refineries have further diminished the already limited supply of fuel in the global market. An attack targeted a refinery in Russia’s Tatarstan region, compounding the decline in Russian refining activity. Meanwhile, Saudi Arabia’s Jazan refinery has remained offline since July 27 following an earlier attack. These outages impact regions that traditionally supply substantial volumes of refined petroleum products to international markets. Additionally, global refinery throughput during June was considerably below year-earlier levels, as several major refining centers operated with reduced capacity.
Russia has extended restrictions on diesel and gasoline exports through January 31, 2027. Meanwhile, shipments from the Middle East have faced additional hurdles 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 constrained the volume of petroleum products entering global markets during a period characterized by strong refining margins.
Despite high refinery activity, diesel supplies remain tight
In the United States, refiners have processed large quantities of crude oil, yet domestic fuel inventories remain at low levels. Data from the federal government shows that crude inputs to U.S. refineries during the first seven months of 2026 reached their highest point since 2019. Refinery utilization rates have stayed elevated, supported by robust margins that encourage continued processing. Nevertheless, distillate inventories as of August are at their lowest for this period in roughly thirty years. Diesel and heating oil are the main components tracked within the weekly U.S. petroleum statistics for distillate stocks.
Crude oil prices also advanced on Wednesday, with Brent nearing $89.81 a barrel and U.S. West Texas Intermediate around $84.08. The diesel market continues to face upward pressure, driven by reduced supplies of finished fuel amid ongoing refinery disruptions and export restrictions. Diesel remains a vital fuel across sectors such as trucking, agriculture, construction, manufacturing, and other commercial activities. The combination of minimal U.S. inventories, record-high European refining margins, and diminished international refinery output has maintained tightness in refined-product markets on both sides of the Atlantic.