NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high as limited refined-product supplies kept pressure on markets across the United States and Europe. U.S. ultra-low sulfur diesel futures surged 7.4% on Monday, closing at $4.19 a gallon. This marked the largest single-day increase since July 13. Early Wednesday trading pushed the contract close to $4.28 a gallon. Meanwhile, European diesel refining margins remained at record-high levels after rising nearly 10% on Monday.
In the U.S., retail diesel averaged $5.257 a gallon on August 10, down slightly from $5.348 a week earlier. Prices, however, stayed well above the $4.578 average recorded on July 6. The U.S. Energy Information Administration reported a decline of 3.5 million barrels in distillate inventories for the week ending July 31. Stocks fell to 107.2 million barrels from 110.6 million a week earlier. This figure was 5.1% lower than a year ago and 16.1% below the level two years prior.
European costs for converting crude into diesel have also been unusually high. The premium for European low-sulfur gasoil over crude hit a record $74.66 per barrel on July 30. Diesel margins in Europe climbed nearly 10% on August 10. The European Central Bank indicated diesel pump prices around €1.98 per litre in the third week of July. Its analysis showed that refining margins contributed about €0.35 per litre during the first three weeks of July, a sharp increase from earlier periods.
Refinery disruptions diminish diesel supplies available in the market
Disruptions at refineries have further reduced fuel output in an already tight global market. An attack damaged a refinery in Russia’s Tatarstan region, adding to the decline in Russian refining activity. Saudi Arabia’s Jazan refinery has also remained offline since July 27 following an earlier attack. These outages impact regions that typically supply large volumes of refined petroleum to international markets. In June, global refinery activity was already well below last year’s levels, as several major centers operated at reduced capacity.
Russia extended restrictions on gasoline and diesel exports through January 31, 2027. Middle Eastern product shipments also faced disruptions due to sharply decreased vessel traffic through the Strait of Hormuz. Traffic in the waterway has fallen far below previous levels amid regional conflicts. Additionally, reduced refining activity in China has limited the flow of petroleum products into global markets during a time of high refining margins.
Refining activity remains high, but diesel supplies tighten
Despite robust refining output, U.S. fuel inventories are at historic lows. Data from the federal government shows that crude inputs to U.S. refineries during the first seven months of 2026 reached their highest point since 2019. Refinery utilization remains high due to strong profit margins. Nonetheless, distillate inventories in early August were the lowest for this period in about thirty years. Diesel and heating oil are the main components tracked in weekly U.S. petroleum statistics for distillates.
Crude oil prices increased Wednesday, with Brent near $89.81 a barrel and U.S. West Texas Intermediate around $84.08. Diesel markets face intensified pressure due to tightening supplies caused by refinery disruptions and export limitations. Diesel remains essential for trucking, agriculture, construction, manufacturing, and other commercial sectors. The combined effect of low U.S. inventories, record European refining margins, and decreased international refinery output has kept markets for refined products tight across both continents.