NEW YORK / RankWire.AI / – On Wednesday, diesel prices maintained their elevated levels due to limited inventories and refinery outages impacting fuel availability in the United States and Europe. Futures for U.S. ultra-low sulfur diesel surged 7.4% on Monday, ending at $4.19 a gallon, marking the most significant daily rise since July 13. As of early Wednesday, the contract traded near $4.28 a gallon, with refined-product markets continuing to reflect constrained supply across key consuming regions.
Diesel stockpiles in the U.S. remain significantly below recent seasonal averages. According to the U.S. Energy Information Administration, distillate inventories stood at 107.2 million barrels for the week ending July 31, a decrease of 3.5 million barrels from the previous week. Compared to the same period last year, stocks were down 5.1%, and they were 16.1% lower than the same measure in 2024. Distillates, which include diesel and heating oil, are crucial for transportation, industrial operations, and seasonal energy needs.
Despite a modest weekly dip, retail diesel prices continue to stay high. On August 10, the national average hit $5.257 per gallon, down from $5.348 the previous week, but still well above the $4.578 average recorded on July 6. Fuel markets across Europe face similar pressures, with low-sulfur gasoil margins rising sharply. The premium over crude oil reached a record $74.66 per barrel on July 30, as finished diesel commanded higher market values.
Refinery disruptions decrease global diesel availability
The global supply of diesel has been further squeezed by multiple refinery outages. An attack damaged a refinery in Russia’s Tatarstan region, compounding reduced processing activity in the country. Since July 27, Saudi Arabia’s Jazan refinery has remained offline following an earlier attack, removing another source of refined products from international markets. During June, refinery runs across various producing regions already declined below the levels seen in the same period last year, restricting the flow of fuel into global trade channels.
Export restrictions have added to the supply constraints. Russia extended bans on gasoline and diesel exports through January 31, 2027. Meanwhile, vessel traffic through the Strait of Hormuz has significantly decreased, affecting Middle Eastern shipments. China’s domestic refinery output has weakened, leading to reduced supplies of refined fuels. The European Central Bank noted diesel pump prices near €1.98 per litre in the third week of July, with higher refining margins increasingly driving retail fuel costs.
High US refinery activity persists despite low inventories
Refining operations in the U.S. continue at high capacity, processing large volumes of crude oil, yet diesel stocks have not rebounded to typical seasonal levels. Crude input during the first seven months of 2026 reached their highest point since 2019 for that period. Refinery utilization rates remain strong, supported by increased processing margins. Despite this, distillate inventories as of August are at their lowest for this time of year in nearly thirty years. The inventory shortage coincides with decreased product flows from several overseas refineries.
Crude oil prices also rose on Wednesday, with Brent crude near $89.81 a barrel and West Texas Intermediate approximately $84.08. While crude prices have climbed, diesel prices face additional upward pressure due to shortages of finished fuel, not just crude supply. Diesel is essential for trucking, agriculture, construction, manufacturing, and other commercial sectors across both regions. Ongoing low inventories in the U.S., elevated European refining margins, refinery outages, and export restrictions continue to keep the global market for diesel and similar middle-distillates tight.