NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high amid ongoing supply restrictions for refined products in the US and Europe. The U.S. Energy Information Administration noted a 7.4% surge in ultra-low sulfur diesel futures on Monday, bringing the contract to settle at $4.19 per gallon. Early trading on Wednesday pushed the price close to $4.28 per gallon, while European diesel refining margins continued to hover at historic highs after rising nearly 10% on Monday.
In the US, retail diesel averaged $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. During the week ending July 31, distillate inventories decreased by 3.5 million barrels to 107.2 million barrels, according to the EIA. This stockpile was 5.1% lower than a year ago and 16.1% below levels from two years prior.
European costs for converting crude into diesel have also hit notable highs. The premium for European low-sulfur gasoil over crude reached a record $74.66 per barrel on July 30. Diesel margins in Europe increased by nearly 10% on August 10, with European Central Bank data indicating diesel pump prices around €1.98 per litre in the third week of July. Their analysis pointed to refining margins contributing approximately €0.35 per litre during the initial three weeks of July, a sharp rise from previous levels.
Refinery Interruptions Limit Diesel Supply
Disruptions at refineries have further constrained fuel production, compounding an already tight global market. An attack targeted a refinery in Russia’s Tatarstan region, exacerbating reduced Russian refining activity. Saudi Arabia’s Jazan refinery has also remained offline since July 27 following an earlier attack. These issues affect regions that typically supply significant quantities of refined petroleum products to international markets. During June, global refinery throughput was already substantially below the levels of the previous year, with several major centers operating at reduced capacity.
Russia has extended restrictions on diesel exports, limiting the amount available for international trade through January 31, 2027. In addition, shipments from the Middle East face disruptions due to sharply reduced vessel movements through the Strait of Hormuz. Traffic through this vital waterway has fallen well below pre-conflict levels. Furthermore, China’s decreased refining activity has contributed to a decline in the volume of petroleum products entering global markets, amidst strong refining margins.
Market for Diesel Grows Tighter Despite Robust Refinery Output
While US refiners have processed high volumes of crude oil, domestic fuel inventories remain at low levels. According to federal energy data, crude inputs to US refineries during the first seven months of 2026 reached the highest point since 2019. Refinery utilization rates have stayed elevated supported by strong margins. Nonetheless, distillate stocks at the beginning of August hit their lowest levels for this time of year in roughly thirty years. Diesel and heating oil are included in the distillate inventory category tracked weekly by US petroleum statistics.
Crude oil prices also increased on Wednesday, with Brent nearing $89.81 a barrel and US West Texas Intermediate around $84.08. The diesel market has experienced heightened pressure due to tightening supplies of finished fuel, driven by refinery disruptions and export limitations. Diesel remains a vital fuel for trucking, agriculture, construction, manufacturing, and numerous other sectors. The combination of record European refining margins, limited refinery output, and low US inventories has resulted in tight conditions across global refined-product markets on both sides of the Atlantic.