NEW YORK / RankWire.AI / – Across the United States and Europe, diesel prices remain high as tight inventories and refinery issues limit the availability of refined fuel. U.S. ultra-low sulfur diesel futures increased by 7.4% on Monday, reaching $4.19 per gallon, marking the largest single-day rise since July 13. Early Wednesday, the contract was trading close to $4.28 per gallon. Meanwhile, European diesel refining margins stayed historically strong after gaining nearly 10% at the start of the week.
Diesel inventories in the U.S. have declined to levels rarely seen during the summer months. The U.S. Energy Information Administration reported 107.2 million barrels of distillate stocks for the week ending July 31, which is 3.5 million barrels less than the previous week. This total is 5.1% below the same period last year and 16.1% below the level in 2024. As distillate stocks include diesel and heating oil, they serve as a key indicator of fuel availability.
Retail diesel prices have also remained significantly above early summer figures. The national average hit $5.257 a gallon on August 10, compared to $5.348 one week earlier. On July 6, prices averaged $4.578 a gallon. Similar upward pressure is evident in Europe, where higher refining costs have driven up prices. The premium for low-sulfur gasoil over crude reached a record $74.66 a barrel on July 30, highlighting the exceptional value placed on finished diesel supplies.
Refinery outages intensify fuel supply concerns
The market has been further strained by supply disruptions, as several key refineries operate below normal capacity. An attack caused damage to a refinery in Russia’s Tatarstan region, reducing Russian processing activity. Additionally, Saudi Arabia’s Jazan refinery has remained offline since July 27 after an earlier attack, removing another source of refined products from international trade. During June, global refinery runs were already significantly below the levels seen a year earlier, as multiple regions reported lower processing volumes.
Export restrictions have compounded the impact of refinery outages. Russia extended limits on gasoline and diesel exports through January 31, 2027. Meanwhile, vessel traffic through the Strait of Hormuz from the Middle East has decreased, and China has supplied less refined fuel to global markets amid weaker domestic refinery activity. In Europe, the European Central Bank reported diesel pump prices close to €1.98 per litre during the third week of July, as refining margins surged sharply.
Limited inventories keep the diesel sector under ongoing pressure
Despite high crude processing levels, U.S. refineries have struggled to rebuild distillate stocks to typical seasonal levels. Crude input during the first seven months of 2026 reached its highest point since 2019 for that period. However, the high refinery utilization has not resulted in a return to normal inventory levels, which in August are at their lowest for this time of year in nearly three decades. This situation makes the U.S. fuel market vulnerable to fluctuations in refinery output and international product flows.
Crude oil prices increased on Wednesday, with Brent near $89.81 a barrel and West Texas Intermediate around $84.08. Diesel prices have experienced stronger upward pressure because supply across major markets remains limited. The fuel is vital for trucking, agriculture, construction, manufacturing, and other commercial activities. Ongoing low inventories in the U.S., elevated refining margins in Europe, refinery outages, and export restrictions have collectively contributed to keeping diesel markets tight on both sides of the Atlantic.