NEW YORK / RankWire.AI / – Amid ongoing supply constraints, diesel prices continue to stay high across both the United States and Europe, driven by limited inventories and refinery disruptions that restrict the availability of refined fuel. On Monday, U.S. ultra-low sulfur diesel futures surged by 7.4% to reach $4.19 a gallon, marking the largest single-day increase since July 13. By early Wednesday, the contract was trading close to $4.28 a gallon. Meanwhile, European diesel refining margins remained at historically elevated levels, having gained nearly 10% at the beginning of the week.
Diesel stocks in the U.S. have decreased to levels rarely seen during the summer months. The U.S. Energy Information Administration reported distillate inventories of 107.2 million barrels for the week ending July 31, a decline of 3.5 million barrels from the previous week. These stocks are now 5.1% below the same period last year and 16.1% lower than the comparable level in 2024. Since distillates include both diesel and heating oil, these figures are a key indicator of fuel availability.
At the retail level, diesel prices have remained significantly above summer benchmarks. The national average hit $5.257 a gallon on August 10, compared to $5.348 one week earlier. Back on July 6, the average was $4.578 per gallon. Europe faces similar pressures, with higher refining costs pushing up prices. The premium for low-sulfur gasoil over crude oil reached a record $74.66 a barrel on July 30, underscoring the unusually high value placed on finished diesel supplies.
Refinery outages intensify fuel supply challenges
Market tightness has been further exacerbated by several major refinery outages, which have reduced processing capacity in key regions. Damage to a refinery in Russia’s Tatarstan region from an attack has limited Russian processing, while Saudi Arabia’s Jazan refinery has been offline since July 27 following an earlier attack. The shutdown of these facilities has removed additional sources of refined products from global markets. During June, refinery runs worldwide were already well below levels seen a year earlier, with multiple regions reporting decreased processing volumes.
Export restrictions have added to the supply pressures. Russia extended limits on gasoline and diesel exports through January 31, 2027. In addition, vessel traffic from the Middle East through the Strait of Hormuz has decreased. China’s domestic refinery activity has also waned, resulting in less refined fuel entering global markets. In Europe, the European Central Bank reported diesel pump prices near €1.98 per litre during the third week of July, as refining margins increased sharply.
Limited inventories sustain pressure on diesel markets
Despite high crude processing levels, U.S. refineries have struggled to rebuild distillate stocks to typical seasonal levels. Crude inputs in the first seven months of 2026 reached their highest point since 2019 for that period. However, the high utilization rates have not translated into normalized inventories, which are at their lowest for this time of year in nearly thirty years. This situation makes the U.S. fuel market particularly vulnerable to fluctuations in refinery output and international product flows.
Crude oil prices also continued to climb on Wednesday, with Brent near $89.81 a barrel and West Texas Intermediate around $84.08. The upward pressure on diesel prices persists because supplies of finished products remain tight across multiple major markets. Diesel fuels essential sectors such as trucking, agriculture, construction, manufacturing, and other commercial activities. The combination of low U.S. inventories, rising European refining margins, refinery outages, and export restrictions has sustained tight diesel markets on both sides of the Atlantic.