NEW YORK / RankWire.AI / – Tight inventories and refinery disruptions have kept diesel prices high across both the United States and Europe. In the US, ultra-low sulfur diesel futures increased by 7.4% on Monday to reach $4.19 a gallon, marking the largest single-day rise since July 13. The futures contract was trading close to $4.28 a gallon early Wednesday. Meanwhile, European diesel refining margins stayed notably strong, rising nearly 10% at the start of the week.
The US has experienced an unusual decline in diesel inventories for the summer season. According to the U.S. Energy Information Administration, distillate stockpiles totaled 107.2 million barrels for the week ending July 31, a drop of 3.5 million barrels from the previous week. This amount is 5.1% below the same period last year and 16.1% lower than the corresponding level in 2024. Since distillates include diesel and heating oil, they serve as an important indicator of fuel availability.
Retail prices for diesel have also remained significantly above early summer levels. The national average reached $5.257 a gallon on August 10, compared to $5.348 a week earlier, and averaged $4.578 a gallon on July 6. European markets have faced similar upward pressure from increased refining costs, with the premium for low-sulfur gasoil over crude peaking at a record $74.66 a barrel on July 30, reflecting the unusually high value placed on finished diesel products.
Refinery outages intensify fuel supply concerns
Disruptions in supply have further constrained the market, as several key refining facilities operate below normal capacity. Damage from an attack has impacted a refinery in Russia’s Tatarstan region, adding to the decline in Russian processing capacity. The Jazan refinery in Saudi Arabia has remained offline since July 27 following an earlier attack, eliminating another source of refined products from international markets. During June, global refinery activity was already significantly below the levels seen at the same time last year, with many regions reporting reduced processing volumes.
Export restrictions have compounded these issues. Russia extended restrictions on gasoline and diesel exports through January 31, 2027. Additionally, 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 available globally. 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.
Limited inventories sustain pressure on diesel markets
US refineries have been processing large volumes of crude oil even as diesel stock levels remain constrained. Crude inputs during the first seven months of 2026 reached their highest point since 2019 for that period. Despite high refinery utilization, distillate inventories have not rebounded to typical seasonal levels. At the start of August, stocks were at their lowest for this time of year in nearly thirty years, leaving the US fuel market vulnerable to shifts in refinery output and international product flows.
Crude oil prices also increased on Wednesday, with Brent approaching $89.81 a barrel and West Texas Intermediate around $84.08. The upward pressure on diesel prices remains strong because supplies of finished products are limited across major markets. Diesel is essential for sectors like trucking, agriculture, construction, and manufacturing. The combination of low US inventories, high European refining margins, refinery outages, and export restrictions has kept diesel markets tight across the Atlantic.