NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high as constrained refined-product supplies exerted pressure on fuel 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 biggest single-day increase for the contract since July 13. Early Wednesday trading pushed the futures close to $4.28 a gallon, while European diesel refining margins remained at historically elevated levels after increasing nearly 10% on Monday.
As of August 10, U.S. retail diesel averaged $5.257 per gallon, compared to $5.348 a week earlier. These prices stay significantly above the $4.578 average recorded on July 6. The U.S. Energy Information Administration noted a decline of 3.5 million barrels in distillate inventories during the week ending July 31. Inventory levels fell to 107.2 million barrels, down from 110.6 million a week prior. This total is 5.1% below the same period last year and 16.1% lower than two years ago.
European costs for converting crude oil into diesel have also been unusually high. The premium for European low-sulfur gasoil over crude hit a record $74.66 a barrel on July 30. Meanwhile, European diesel margins climbed nearly 10% on August 10. The European Central Bank reported diesel pump prices around €1.98 per litre in the third week of July. Its analysis indicated that refining margins contributed roughly €0.35 per litre during the first three weeks of that month, marking a sharp increase from previous levels.
Refinery outages diminish diesel availability
Disruptions at refineries have further reduced fuel production in an already tight global market. An attack targeted a refinery in Russia’s Tatarstan region, adding to the decline in Russian refining activity. Additionally, Saudi Arabia’s Jazan refinery has remained offline since July 27 following an earlier attack. These interruptions impact regions that typically supply large volumes of refined petroleum products internationally. In June, global refinery runs had already fallen significantly below the levels seen a year earlier, as several major refining centers operated at reduced capacities.
Russia has also limited diesel exports for international markets, extending restrictions on gasoline and diesel shipments through January 31, 2027. The Middle East has experienced further disruptions due to sharply decreased vessel traffic through the Strait of Hormuz, which has fallen well below pre-conflict levels. Moreover, reduced refining activity in China has further constrained the flow of petroleum products into global markets during a period characterized by strong refining margins.
Despite high refinery activity, diesel supply remains tight
U.S. refiners continue processing large volumes of crude oil even as domestic fuel inventories are at their lowest point in about thirty years. Federal energy data reveal that crude input to U.S. refineries during the first seven months of 2026 reached levels not seen since 2019. Refinery utilization remains high, supported by strong margins that encourage continued processing. Nonetheless, distillate inventories at the start of August are at their lowest for this time of year in three decades. Diesel and heating oil are included in the distillate inventory category tracked weekly by U.S. petroleum statistics.
Crude oil prices also moved higher on Wednesday, with Brent near $89.81 a barrel and U.S. West Texas Intermediate at around $84.08. The diesel market continues to experience heightened pressure, as the available supply of finished fuel has tightened amid refinery disruptions and export limitations. Diesel remains essential for trucking, agriculture, construction, manufacturing, and other commercial sectors. The combination of low inventories in the U.S., record-high European refining margins, and diminished international refinery output has resulted in tight refined-product markets on both sides of the Atlantic.