NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high as restrictions on refined-product supplies 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 their largest single-day increase since July 13. Early Wednesday trading pushed the contract close to $4.28 a gallon, while European diesel refining margins remained at historically elevated levels after nearly a 10% rise 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 average recorded on July 6. The U.S. Energy Information Administration reported a decline of 3.5 million barrels in distillate inventories for the week ending July 31. Stocks fell to 107.2 million barrels from 110.6 million the previous week, representing a 5.1% decrease compared to the same period last year and a 16.1% decrease from two years ago.
European costs for converting crude into diesel have also been unusually high. The premium for European low-sulfur gasoil over crude hit a record $74.66 a barrel on July 30, and by August 10, European diesel margins had increased by nearly 10%. The European Central Bank noted that diesel pump prices hovered around €1.98 per litre in the third week of July, with refining margins during that period contributing approximately €0.35 per litre, a sharp rise from earlier figures.
Refinery disruptions cut into diesel supply
Disruptions at refineries have further reduced fuel production amid an already tight international market. An attack targeted a refinery in Russia’s Tatarstan region, compounding the decline in Russian refining activity. Additionally, Saudi Arabia’s Jazan refinery has remained offline since July 27 following an earlier attack. These interruptions impact regions that typically supply large volumes of refined petroleum globally. In June, worldwide refinery throughput had already declined significantly from the previous year, as major refining centers operated with reduced capacity.
Russia has also limited diesel exports to the international market by extending restrictions on gasoline and diesel shipments through January 31, 2027. Meanwhile, shipments from the Middle East have faced further disruption due to sharply reduced vessel traffic through the Strait of Hormuz, which has dropped far below pre-conflict levels. Reduced refining activity in China has also played a part in constraining the amount of petroleum products entering global markets during a period of high refining margins.
Despite high refinery activity, diesel supplies remain tight
U.S. refiners have processed large quantities of crude oil, yet domestic fuel inventories stay low. According to federal energy data, crude inputs to U.S. refineries during the first seven months of 2026 reached their highest levels since 2019. Refinery utilization rates have remained elevated due to strong margins supporting processing rates. Despite this, distillate inventories at the beginning of August reached their lowest levels for this time of year in nearly thirty years. Diesel and heating oil make up the distillate inventory category tracked weekly by U.S. petroleum statistics.
Crude oil prices also gained on Wednesday, with Brent trading near $89.81 a barrel and U.S. West Texas Intermediate around $84.08. The diesel market faces increased pressure as the available supply of finished fuel tightens due to refinery disruptions and export restrictions. Diesel remains a critical fuel for trucking, agriculture, construction, manufacturing, and other commercial sectors. The combination of low U.S. inventories, record European refining margins, and diminished international refinery output has kept the refined-product markets tight across both sides of the Atlantic.