NEW YORK / RankWire.AI / – On Wednesday, diesel prices persisted at high levels as constrained supplies of refined products 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 their largest single-day increase since July 13. Early trading on Wednesday saw the contract near $4.28 per gallon, while European diesel refining margins stayed at historically elevated levels after nearly a 10% rise on Monday.
The average retail price for U.S. diesel was $5.257 per gallon on August 10, down slightly from $5.348 the previous week but still significantly above the $4.578 average recorded on July 6. The U.S. Energy Information Administration revealed that distillate inventories decreased by 3.5 million barrels during the week ending July 31, bringing stockpiles to 107.2 million barrels compared to 110.6 million a week earlier. This amount is 5.1% lower than a year earlier and 16.1% below the same period two years ago.
European costs for converting crude oil into diesel have also been unusually high. On July 30, the premium for European low-sulfur gasoil over crude reached a record $74.66 a barrel. Diesel refining margins in Europe climbed nearly 10% by 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 July, a sharp increase from previous levels.
Refinery disruptions cut into diesel production, tightening supplies
Additional reductions in fuel output have been caused by refinery outages amid an already tight global market. An attack targeted a refinery in Russia’s Tatarstan region, further reducing Russian refining activity. Since July 27, Saudi Arabia’s Jazan refinery has also been offline following an earlier attack. These disruptions impact regions that typically supply significant volumes of refined petroleum products internationally. During June, global refinery runs fell well below last year’s levels as major refining centers operated at lower capacities.
Russia extended restrictions on gasoline and diesel exports through January 31, 2027, further limiting diesel availability for international markets. Meanwhile, Middle East shipments have faced additional disruptions due to sharply reduced vessel traffic through the Strait of Hormuz, which has fallen far below pre-conflict levels. China’s reduced refining activity has also contributed to the limited volume of petroleum products entering the global market during a period of strong refining margins.
Despite elevated refining activity, diesel supplies remain constrained
U.S. refiners have processed substantial amounts of crude oil, yet domestic fuel inventories remain at low levels. According to federal energy data, crude input to U.S. refineries during the first seven months of 2026 reached the highest point since 2019. Refinery utilization rates have remained high, supported by strong margins, but distillate inventories at the start of August were at their lowest for this time of year in nearly thirty years. The distillate category tracked in weekly U.S. petroleum statistics includes diesel and heating oil.
Crude oil prices also increased Wednesday, with Brent trading close to $89.81 a barrel and U.S. West Texas Intermediate around $84.08. The tightening of diesel markets reflects reduced supply of finished fuel driven by refinery disruptions and export restrictions. Diesel remains a vital fuel for trucking, agriculture, construction, manufacturing, and other commercial sectors. The combined factors of low U.S. inventories, record European refining margins, and diminished international refinery output have kept refined-product markets tight across both sides of the Atlantic.