NEW YORK / RankWire.AI / – The price of diesel continues to climb across the United States and Europe, driven by limited supplies caused by refinery disruptions and low stock levels. 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. By early Wednesday, the contract traded close to $4.28 a gallon. Meanwhile, European diesel refining margins stayed near historically high levels after gaining nearly 10% at the beginning of the week.
In the US, diesel inventories have fallen to levels rarely seen during the summer months. According to the U.S. Energy Information Administration, distillate stocks for the week ending July 31 stood at 107.2 million barrels, a decline of 3.5 million barrels from the previous week. These stocks are now 5.1% below the same period last year and 16.1% lower than the comparable figure in 2024. The category includes diesel and heating oil, making it a critical indicator of fuel availability.
Retail prices for diesel have also remained significantly above early summer levels. The national average hit $5.257 per gallon on August 10, compared to $5.348 a week earlier. On July 6, prices averaged only $4.578 per gallon. Similar upward pressure has affected Europe, where higher refining costs have increased diesel premiums. The low-sulfur gasoil price premium over crude hit a record $74.66 a barrel on July 30, emphasizing the elevated value assigned to finished diesel supplies.
Refinery outages intensify fuel scarcity concerns
Disruptions in supply have further tightened the market as several key refining facilities operate below normal capacity. An attack caused damage to a refinery in Russia’s Tatarstan region, decreasing Russian processing activity. Additionally, Saudi Arabia’s Jazan refinery has remained offline since July 27 following an earlier attack, removing another source of refined products from international markets. During June, global refinery runs were already well below the levels seen a year earlier, with multiple regions reporting reduced processing volumes.
Export restrictions have compounded these supply issues. Russia extended limits on gasoline and diesel shipments through January 31, 2027. Vessel traffic through the Strait of Hormuz from the Middle East has decreased, and China’s domestic refinery activity has weakened, resulting in less refined fuel supplied to global markets. In Europe, the European Central Bank reported diesel pump prices near €1.98 per litre during the third week of July as refining margins surged sharply.
Persistent low inventories sustain pressure on diesel markets
Despite high crude processing volumes, US diesel stocks remain constrained. Crude inputs during the first seven months of 2026 reached their highest levels for that period since 2019. Yet, high refinery utilization has not sufficiently rebuilt distillate inventories to typical seasonal levels. At the start of August, stocks were at their lowest point for this time of year in nearly thirty years. This situation makes the US fuel market particularly vulnerable to fluctuations in refinery output and international product flows.
Crude oil prices also increased on Wednesday, with Brent nearing $89.81 a barrel and West Texas Intermediate around $84.08. Diesel prices remain under strong upward pressure due to ongoing supply limitations across key markets. The fuel plays a vital role in trucking, agriculture, construction, manufacturing, and other sectors. The combination of low US inventories, high European refining margins, refinery outages, and export restrictions has kept diesel markets tight across both sides of the Atlantic.