NEW YORK / RankWire.AI / – As of Wednesday, diesel prices have stayed high due to constrained inventories and refinery shutdowns affecting fuel availability in both the United States and Europe. On Monday, U.S. ultra-low sulfur diesel futures surged by 7.4% to close at $4.19 a gallon, marking the biggest daily increase since July 13. Early Wednesday, the contract traded close to $4.28 a gallon, with refined-product markets continuing to signal limited supply across key consumption areas.
In recent weeks, U.S. diesel stockpiles have remained significantly below typical seasonal levels. According to the U.S. Energy Information Administration, distillate inventories for the week ending July 31 totaled 107.2 million barrels, 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, including diesel and heating oil, are vital for transportation, industrial processes, and seasonal energy needs.
Despite a slight weekly decline, retail diesel prices have remained elevated. The U.S. national average reached $5.257 per gallon on August 10, down from $5.348 the week prior, yet still well above the July 6 figure of $4.578. Similarly, European fuel markets have experienced comparable pressure, with low-sulfur gasoil margins rising sharply. The premium over crude oil hit a record $74.66 a barrel on July 30, as finished diesel commanded higher prices.
Refinery shutdowns impair global diesel supplies
Multiple refinery outages have further curtailed the worldwide availability of diesel for international buyers. In Russia’s Tatarstan region, a refinery was damaged in an attack, adding to the already reduced processing activity within the country. The Jazan refinery in Saudi Arabia has been offline since July 27 following an earlier attack, removing another source of refined products from global trade channels. During June, refinery runs across several producing regions had already fallen below last year’s levels, limiting the volume of fuel entering international markets.
Export restrictions have also limited the flow of refined fuels. Russia extended export bans on gasoline and diesel through January 31, 2027. Meanwhile, vessel traffic through the Strait of Hormuz has sharply decreased for Middle East shipments. China’s domestic refinery activity weakened, leading to lower supplies of refined fuels. The European Central Bank reported diesel pump prices near €1.98 per litre in the third week of July, with higher refining margins contributing significantly to retail fuel costs.
High refinery activity in the U.S. contrasts with persistently low inventories
Throughout the first seven months of 2026, American refiners processed substantial amounts of crude, yet diesel stock levels remained below typical seasonal figures. Crude input during this period reached their highest since 2019. Refinery utilization rates stayed strong, supported by increased processing margins. Nonetheless, distillate stocks at the start of August are at their lowest point for this season in nearly thirty years. This inventory deficit coincides with reduced product flows from several overseas refining centers.
Crude oil prices also rose on Wednesday, with Brent near $89.81 a barrel and West Texas Intermediate around $84.08. The pressure on diesel prices is more driven by shortages of finished fuels rather than crude supplies alone. Diesel is crucial for trucking, agriculture, construction, manufacturing, and other sectors across both regions. Limited U.S. inventories, elevated European refining margins, refinery outages, and export restrictions continue to tighten the global diesel market and other middle-distillate fuels.