NEW YORK / RankWire.AI / – Persistent pressure on fuel markets in the United States and Europe kept diesel prices high on Wednesday, driven by tighter supplies of refined products. U.S. ultra-low sulfur diesel futures experienced a 7.4% jump on Monday, closing at $4.19 per gallon, marking the largest single-day increase since July 13. Early Wednesday trading saw the contract near $4.28 per gallon, while European diesel refining margins stayed at historically elevated levels after rising nearly 10% on Monday.
In the US, retail diesel averaged $5.257 per gallon on August 10, compared to $5.348 a week earlier. Prices remained significantly above the $4.578 average recorded on July 6. According to the U.S. Energy Information Administration, distillate inventories declined by 3.5 million barrels during the week ending July 31, dropping to 107.2 million barrels from 110.6 million a week prior. This level was 5.1% below the same period last year and 16.1% lower than the same period two years ago.
European costs for converting crude oil into diesel have also been unusually high, with the premium for European low-sulfur gasoil over crude reaching a record $74.66 a barrel on July 30. Refining margins in Europe climbed nearly 10% by August 10. The European Central Bank reported diesel pump prices at around €1.98 per litre during the third week of July. Its analysis indicated that refining margins contributed roughly €0.35 per litre in the first three weeks of July, a significant increase from earlier levels.
Refinery outages reduce diesel supply availability
Disruptions at refineries have led to a reduction in fuel production, compounding an already constrained global market. An attack damaged a refinery in Russia’s Tatarstan region, further decreasing Russian refining capacity. Meanwhile, Saudi Arabia’s Jazan refinery has remained offline since July 27 after an earlier attack. These outages impact regions that normally supply substantial volumes of refined petroleum products to international markets. During June, global refinery runs had already fallen well below last year’s levels, with several major centers operating at reduced throughput.
Russia has also limited diesel exports for international trade, extending restrictions on gasoline and diesel shipments through January 31, 2027. Additionally, vessel movements through the Strait of Hormuz have sharply declined, affecting Middle Eastern product shipments. This reduction is a consequence of the ongoing regional conflict, which has drastically lowered traffic through the strategic waterway. China’s decreased refining activity further restricts the flow of petroleum products into global markets during a period of strong refining margins.
Despite high refinery activity, diesel markets remain tight
U.S. refiners have processed substantial volumes of crude oil, but domestic fuel inventories continue to be low. Federal energy reports reveal that crude inputs to U.S. refineries during the first seven months of 2026 reached their highest levels since 2019. Refinery utilization remains high, supported by strong profit margins that sustain processing rates. Nevertheless, distillate inventories as of August are at their lowest for this time of year in nearly thirty years. Diesel and heating oil are the primary components tracked within the distillate inventory category in weekly U.S. petroleum data.
Crude oil prices also advanced on Wednesday, with Brent near $89.81 a barrel and U.S. West Texas Intermediate around $84.08. The diesel market remains under pressure as the available supply of finished fuel tightens, influenced by refinery disruptions and export restrictions. Diesel continues to be a vital fuel for trucking, agriculture, construction, manufacturing, and other commercial sectors. The combination of low U.S. inventories, record European refining margins, and diminished international refinery output has kept refined-product markets tight across both sides of the Atlantic.