NEW YORK / RankWire.AI / – Across the United States and Europe, diesel costs remain high due to limited inventories and refinery disruptions, which have curtailed the availability of finished fuel. U.S. ultra-low sulfur diesel futures surged 7.4% on Monday to reach $4.19 a gallon, marking the largest single-day increase since July 13. As of early Wednesday, the contract traded close to $4.28 a gallon. Meanwhile, European diesel refining margins stayed at historically elevated levels after nearly 10% gains at the beginning of the week.
Diesel stockpiles in the U.S. have fallen to levels rarely seen during the summer months. The U.S. Energy Information Administration reported 107.2 million barrels of distillate inventories for the week ending July 31, 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% lower than the comparable level in 2024. Since distillates include diesel and heating oil, they serve as a key indicator of fuel availability.
Retail prices for diesel have also remained significantly above levels seen earlier in the summer. The national average in the U.S. reached $5.257 a gallon on August 10, compared to $5.348 one week prior. On July 6, prices averaged $4.578 a gallon. In Europe, similar pressure is evident from rising refining costs, with the low-sulfur gasoil premium over crude hitting a record $74.66 a barrel on July 30, underscoring the unusually high value attributed to finished diesel supplies.
Refinery outages intensify fuel supply challenges
The market faces further tightening due to several major refining facilities operating below normal capacity. An attack damaged a refinery in Russia’s Tatarstan region, contributing to decreased processing activity in Russia. Additionally, Saudi Arabia’s Jazan refinery has remained offline since July 27 following an earlier attack, removing another key source of refined products from international markets. During June, global refinery runs were already significantly below the levels recorded a year earlier, with multiple regions reporting lower throughput.
Export restrictions have worsened the supply situation. Russia extended restrictions on gasoline and diesel exports until January 31, 2027. Vessel traffic through the Strait of Hormuz from the Middle East has also decreased. Meanwhile, China has contributed less refined fuel to global markets as its domestic refinery activity slowed. In Europe, the European Central Bank reported diesel pump prices near €1.98 per litre during the third week of July, coinciding with sharply rising refining margins.
Limited inventories keep diesel markets under persistent pressure
Despite high crude processing volumes, U.S. refineries have struggled to rebuild distillate stocks, which remain constrained. Crude input levels during the first seven months of 2026 reached their highest since 2019 for that period. However, high refinery utilization has not restored inventories to typical seasonal levels, which are at their lowest for this time of year in about thirty years. This situation makes the U.S. fuel market particularly vulnerable to fluctuations in refinery output and global product flows.
Crude oil prices also increased on Wednesday, with Brent near $89.81 a barrel and West Texas Intermediate around $84.08. Diesel prices remain under stronger upward pressure due to ongoing supply limitations in key markets. The sector supports trucking, agriculture, construction, manufacturing, and other commercial sectors. The combination of low U.S. inventories, high European refining margins, refinery outages, and export restrictions continues to sustain tight diesel markets across both sides of the Atlantic.