NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high as constrained refined-product inventories continued to exert 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 trading on Wednesday pushed the contract close to $4.28 a gallon, while diesel refining margins in Europe persisted at record-high levels after nearly a 10% increase on Monday.
As of August 10, U.S. retail diesel averaged $5.257 per gallon, down slightly from $5.348 a week earlier but still significantly above the $4.578 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 the previous week. This figure is 5.1% lower than a year prior and 16.1% below the same period two years ago.
European diesel costs have also been unusually elevated, with the premium for European low-sulfur gasoil over crude reaching a historic $74.66 per barrel on July 30. Following this, European diesel margins increased nearly 10% on August 10. The European Central Bank reported pump prices around €1.98 per litre in the third week of July. Their analysis indicated that refining margins added approximately €0.35 per litre during the first three weeks of that month, marking a sharp rise from previous levels.
Refinery outages constrain diesel availability
Disruptions at refineries have removed additional fuel supplies from an already tight international market. An attack targeted a refinery in Russia’s Tatarstan region, adding to the ongoing decline in Russian refining activity. Since July 27, Saudi Arabia’s Jazan refinery has been offline following an earlier attack. These interruptions impact regions that typically supply large volumes of refined petroleum products to the global market. In June, worldwide refinery throughput had already fallen significantly below last year’s levels, as several major centers operated at reduced capacity.
Russia has also extended restrictions on diesel exports to the international market through January 31, 2027, limiting available supplies. In addition, shipments from the Middle East have faced further disruption due to sharply reduced vessel traffic through the Strait of Hormuz, which has fallen well below pre-conflict levels. China’s decreased refining activity has further restricted the flow of petroleum products into global markets during a period marked by high refining margins.
Despite elevated refining activity, the diesel market remains tight
U.S. refiners have been processing large volumes of crude oil, yet domestic fuel inventories remain at historic lows. Data from the federal government show that crude inputs to U.S. refineries during the first seven months of 2026 reached their highest point since 2019. Refinery utilization rates have stayed high, supported by robust margins that incentivize processing. Nevertheless, distillate inventories at the start of August are at their lowest levels for this time of year in nearly thirty years. Diesel and heating oil are the primary components tracked within the distillate category in weekly U.S. petroleum reports.
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 continues to face intensified pressure as the available supply of finished fuel tightens due to ongoing refinery disruptions and export restrictions. Diesel remains essential for trucking, agriculture, construction, manufacturing, and other commercial sectors. The combination of low U.S. inventories, record-high European refining margins, and reduced refinery output internationally has kept refined-product markets tight across both the Atlantic and the Pacific.