NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high due to tightening supplies of refined products, exerting upward pressure on fuel markets in both the United States and Europe. U.S. ultra-low sulfur diesel futures experienced a 7.4% jump on Monday, closing at $4.19 a gallon, marking the largest single-day increase since July 13. Early trading on Wednesday pushed the contract close to $4.28 per gallon, while European diesel refining margins remained at historically elevated levels after rising nearly 10% on Monday.
The average retail price for diesel in the U.S. was $5.257 a gallon on August 10, slightly lower than the $5.348 recorded a week earlier. Despite this decline, prices are still significantly above the $4.578 average noted on July 6. According to the U.S. Energy Information Administration, distillate inventories decreased by 3.5 million barrels during the week ending July 31, dropping to 107.2 million barrels from 110.6 million a week prior. This volume is 5.1% below the same period last year and 16.1% lower than two years ago.
European costs for converting crude into diesel have also reached unusual heights. The premium for European low-sulfur gasoil over crude hit a record $74.66 a barrel on July 30. Following this, European diesel margins climbed nearly 10% by August 10. The European Central Bank indicated that diesel pump prices hovered around €1.98 per litre in the third week of July. Its analysis highlighted that refining margins contributed approximately €0.35 per litre during the first three weeks of July, a sharp increase from earlier levels.
Refinery disruptions restrict diesel availability
Disruptions at key refineries have reduced global fuel supplies further amid an already tight market. An attack targeted a refinery in Russia’s Tatarstan region, exacerbating 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 substantial volumes of refined petroleum products to international markets. During June, worldwide refinery operations had already fallen well below levels from the previous year, as many major centers operated at reduced throughput.
Russia has also extended restrictions on diesel exports for international trade through January 31, 2027. Meanwhile, Middle Eastern shipments have experienced further delays due to sharply reduced vessel traffic through the Strait of Hormuz, which has fallen significantly below pre-regional conflict levels. China’s decreased refining output has also limited petroleum product supplies entering global markets during a period of strong refining margins.
Refined fuel markets tighten despite robust refining activity
U.S. refiners have processed large volumes of crude oil, even as domestic inventories of fuel remain at low levels. Data from the federal government show that crude inputs into U.S. refineries during the first seven months of 2026 reached their highest point since 2019. Refinery utilization rates have stayed high, supported by strong margins that encourage continued processing. Nonetheless, distillate inventories at the start of August were at their lowest for this time of year in nearly thirty years. Diesel and heating oil make up the distillate category tracked weekly in U.S. petroleum statistics.
Crude oil prices also increased on Wednesday, with Brent crude trading near $89.81 a barrel and U.S. West Texas Intermediate around $84.08. The tightness in diesel markets is driven by the limited supply of finished fuel, compounded by refinery disruptions and export restrictions. Diesel continues to be vital for sectors such as trucking, agriculture, construction, manufacturing, and various other commercial activities. The combination of dwindling U.S. inventories, record European refining margins, and reduced global refinery output has sustained a tight market for refined products across both sides of the Atlantic.