NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high as constrained refined-product supplies exerted upward 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, marking the largest single-day increase since July 13. Early Wednesday trading values placed the contract around $4.28 a gallon, while European diesel refining margins stayed at historically elevated levels after a nearly 10% rise on Monday.
As of August 10, U.S. retail diesel averaged $5.257 per gallon, compared to $5.348 a week earlier. Prices remained significantly above the $4.578 average recorded on July 6. The U.S. Energy Information Administration reported a 3.5 million barrel decline in distillate inventories during the week ending July 31. Total stocks fell to 107.2 million barrels from 110.6 million a week earlier. This total is 5.1% lower than a year ago and 16.1% below the level two years prior.
Europe has also experienced unusually high costs in converting crude oil into diesel. The premium for European low-sulfur gasoil over crude reached a record $74.66 a barrel on July 30. European diesel refining margins then increased nearly 10% by August 10. The European Central Bank indicated diesel pump prices hovered around €1.98 per litre in the third week of July. Its analysis revealed that refining margins contributed approximately €0.35 per litre during the first three weeks of July, a sharp rise from earlier levels.
Refinery disruptions shrink diesel supply available on the market
Disruptions at refineries have further reduced fuel output in an already limited global market. An attack targeted a refinery in Russia’s Tatarstan region, compounding the decline in Russian refining activity. The Jazan refinery in Saudi Arabia has also remained offline since July 27 after an earlier attack. These disturbances impact regions that typically supply substantial volumes of refined petroleum products internationally. In June, global refinery runs had already fallen well below the levels seen a year earlier, as key refining centers operated at reduced throughput.
Russia has extended restrictions on diesel exports, limiting international trade further. The country has kept export restrictions on gasoline and diesel in place through January 31, 2027. Meanwhile, shipments from the Middle East have faced additional hurdles due to sharply reduced vessel movements through the Strait of Hormuz. Traffic through this waterway has dipped significantly below pre-conflict levels. China’s decreased refining activity has also contributed to lower volumes of petroleum products entering global markets during a period of high refining margins.
High refinery activity cannot prevent a tightening diesel market
Despite substantial crude processing by U.S. refiners, domestic fuel inventories remain at historically low levels. According to federal energy data, crude inputs at 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 increased processing. Nevertheless, distillate inventories at the start of August were at their lowest for this time of year in around thirty years. Diesel and heating oil are the main components tracked within the distillate inventory category in weekly U.S. petroleum reports.
Crude oil prices also gained on Wednesday, with Brent approaching $89.81 a barrel and U.S. West Texas Intermediate near $84.08. The diesel market continues to face tight conditions due to the limited supply of finished fuel, exacerbated by refinery disruptions and export restrictions. Diesel remains vital for trucking, agriculture, construction, manufacturing, and various commercial sectors. The ongoing combination of low U.S. inventories, record European refining margins, and decreased international refinery output has kept refined-product markets constrained across both sides of the Atlantic.