NEW YORK / RankWire.AI / – On Wednesday, diesel prices remained high as supply constraints in refined products continued to exert upward pressure on fuel markets across the United States and Europe. U.S. ultra-low sulfur diesel futures surged by 7.4% on Monday, closing at $4.19 per gallon, marking their largest single-day increase since July 13. Early Wednesday trading saw the contract near $4.28 per gallon, while European diesel refining margins stayed at historically elevated levels after nearly a 10% increase on Monday.
The U.S. average retail diesel price on August 10 was $5.257 per gallon, down slightly from $5.348 a week earlier but still significantly above the $4.578 average recorded on July 6. According to the U.S. Energy Information Administration, distillate inventories declined by 3.5 million barrels during the week ending July 31, falling to 107.2 million barrels from 110.6 million a week prior. This level is 5.1% below the same period last year and 16.1% lower than two years ago.
In Europe, costs for converting crude oil into diesel have also reached unusual heights. The premium for European low-sulfur gasoil over crude oil hit a record $74.66 per barrel on July 30. Following this, European diesel margins increased by nearly 10% on August 10. The European Central Bank reported that diesel pump prices hovered around €1.98 per litre in the third week of July, with refining margins during the first three weeks of the month contributing about €0.35 per litre, a significant rise from earlier periods.
Refinery outages restrict diesel supply in global markets
Disruptions at refineries have further limited fuel production in an already tight international market. An attack targeted a refinery in Russia’s Tatarstan region, compounding the effects of reduced refining activity in Russia. Saudi Arabia’s Jazan refinery has remained offline since July 27 after an earlier attack. These outages impact regions that typically supply large volumes of refined petroleum products to international markets. During June, global refinery throughput had already fallen significantly below last year’s levels, as several major centers operated at reduced capacities.
Russia also extended restrictions on diesel exports, along with gasoline, through January 31, 2027. Meanwhile, shipments from the Middle East have faced additional challenges due to sharply decreased vessel traffic through the Strait of Hormuz, with traffic falling well below pre-conflict levels. Chinese refinery activity has also declined, further limiting the supply of petroleum products entering global markets during a period of robust refining margins.
Despite high refining activity, diesel supplies grow scarcer
Refiners in the U.S. have processed large volumes of crude oil, yet domestic inventories of fuel remain at low levels. Federal energy data show that crude inputs to U.S. refineries during the first seven months of 2026 reached their highest point since 2019. High margins have supported strong processing rates, keeping utilization rates elevated. Nonetheless, by the start of August, distillate inventories had fallen to their lowest seasonal levels in approximately three decades. Diesel and heating oil are the primary components of the distillate inventory category tracked weekly in U.S. petroleum statistics.
Crude oil prices also increased on Wednesday, with Brent trading near $89.81 a barrel and U.S. West Texas Intermediate around $84.08. The diesel market remains under pressure as supply tightens amid refinery disruptions and export restrictions. Diesel remains a crucial fuel for trucking, agriculture, construction, manufacturing, and other commercial sectors. The combined effects of low U.S. inventories, record European refining margins, and diminished international refinery output have kept the refined-product markets tight across both sides of the Atlantic.