NEW YORK / RankWire.AI / – As inventories tighten and refinery operations face disruptions, diesel prices remain high in both the United States and Europe. U.S. ultra-low sulfur diesel futures increased by 7.4% on Monday, reaching $4.19 a gallon, marking the largest daily rise since July 13. By early Wednesday, the futures traded near $4.28 a gallon. Meanwhile, European diesel refining margins stayed robust, gaining nearly 10% at the week’s start, maintaining historically high levels.
Diesel stockpiles in the U.S. have dropped to levels rarely seen during the summer months. According to the U.S. Energy Information Administration, distillate stocks totaled 107.2 million barrels for the week ending July 31, a decline of 3.5 million barrels from the previous week. This figure is 5.1% below the same period last year and 16.1% beneath the corresponding level in 2024. As distillates include diesel and heating oil, these stocks serve as a key indicator of fuel availability.
Average retail diesel prices in the U.S. continue to stay significantly above early summer levels. On August 10, the national average hit $5.257 a gallon, slightly lower than the $5.348 recorded a week earlier. In comparison, prices averaged $4.578 a gallon on July 6. Europe is experiencing similar pressure, with refining costs driving prices higher. The premium for low-sulfur gasoil over crude reached a record $74.66 a barrel on July 30, underscoring the extraordinary value placed on finished diesel supplies.
Refinery outages escalate concerns over fuel availability
Reduced processing capacity at several major refineries is further tightening supply. An attack damaged a refinery in Russia’s Tatarstan region, reducing Russian processing capacity. Additionally, Saudi Arabia’s Jazan refinery has remained offline since July 27 following an earlier attack, removing another source of refined products from global markets. Already, in June, global refinery throughput was noticeably below last year’s levels, with multiple regions reporting lower processing volumes.
Export restrictions have intensified the impact of refinery outages. Russia extended restrictions on gasoline and diesel shipments through January 31, 2027. In the Middle East, vessel traffic through the Strait of Hormuz has decreased, limiting exports. China’s domestic refinery activity has slowed, contributing less refined fuel to international 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 soared.
Limited inventories sustain pressure on diesel markets
Despite high crude throughput, U.S. diesel stocks remain constrained. Crude inputs during the first seven months of 2026 reached their highest level for that period since 2019, yet high refinery utilization has failed to restore distillate inventories to typical seasonal levels. As a result, stocks at the start of August were at their lowest for this time of year in nearly three decades, leaving the U.S. fuel sector vulnerable to shifts in refinery output and international product flows.
Crude oil prices also increased on Wednesday, with Brent close to $89.81 a barrel and West Texas Intermediate around $84.08. The upward pressure on diesel prices is even more pronounced because supplies of finished products are limited across several key markets. Diesel is vital for trucking, agriculture, construction, manufacturing, and other commercial sectors. The combination of low U.S. inventories, high European refining margins, refinery outages, and export restrictions has kept the diesel market tight on both sides of the Atlantic.