NEW YORK / RankWire.AI / – As inventories tighten and refinery outages continue to disrupt fuel supply chains in the United States and Europe, diesel prices stayed elevated on Wednesday. U.S. ultra-low sulfur diesel futures surged 7.4% on Monday, settling at $4.19 a gallon, marking the largest daily gain since July 13. Early Wednesday, the contract traded close to $4.28 a gallon, reflecting ongoing supply limitations across major consuming regions in the refined-product markets.
U.S. diesel stocks are significantly below recent seasonal averages, with the U.S. Energy Information Administration reporting 107.2 million barrels of distillate inventories for the week ending July 31, which is 3.5 million barrels less than the previous week. These stocks are also 5.1% lower than the same period last year and 16.1% below the comparable level in 2024. Distillates include diesel and heating oil, both vital for transportation, industry, and seasonal energy needs.
Despite a modest weekly decrease, retail diesel prices remain high, with the U.S. national average reaching $5.257 per gallon on August 10, down from $5.348 the week before. However, this figure still exceeds the $4.578 average recorded on July 6. Similarly, European fuel markets have experienced pressure, with sharp rises in low-sulfur gasoil margins. On July 30, the premium over crude oil hit a record $74.66 per barrel as finished diesel commanded higher market values.
Refinery shutdowns limit worldwide diesel availability
The global supply of diesel has been further constrained by several refinery disruptions. A targeted attack damaged a refinery in Russia’s Tatarstan region, compounding already reduced processing activity within the country. The Jazan refinery in Saudi Arabia has remained offline since July 27 following an earlier attack, removing another source of refined products from international markets. During June, refinery runs in various producing regions already fell below last year’s levels, restricting the amount of fuel available for export.
Additional restrictions on exports have added pressure to the flow of refined products. Russia extended restrictions on gasoline and diesel shipments through January 31, 2027, while vessel traffic through the Strait of Hormuz from the Middle East has sharply declined. China’s domestic refinery activity has weakened, leading to reduced supplies of refined fuels. The European Central Bank indicated diesel pump prices near €1.98 per litre in the third week of July, with higher refining margins contributing to a larger portion of retail fuel costs.
Strong refinery activity in the US amid low inventories
While American refiners processed large volumes of crude during the first seven months of 2026—reaching the highest level for that period since 2019—diesel inventories have not returned to typical seasonal levels. Refinery utilization remains high, supported by increased processing margins, yet distillate stocks as of August are at their lowest for this time of year in nearly thirty years. The inventory shortage coincides with diminished product flows from several overseas refineries.
Crude oil prices also increased Wednesday, with Brent trading near $89.81 a barrel and West Texas Intermediate around $84.08. The pressure on diesel prices is driven more by shortages of finished fuels rather than crude supply alone, given their critical role in trucking, agriculture, construction, manufacturing, and other sectors across both regions. Persistent low U.S. inventories, elevated European refining margins, refinery shutdowns, and export restrictions continue to tighten the global market for diesel and other middle-distillates.