NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed high due to limited inventories and refinery outages disrupting fuel supplies in both the United States and Europe. The futures for U.S. ultra-low sulfur diesel surged 7.4% on Monday, closing at $4.19 a gallon, marking the biggest one-day increase since July 13. Early Wednesday, the contract traded near $4.28 a gallon as the refined-product markets continued to reflect a supply shortage across key consuming regions.
The U.S. currently has diesel inventories significantly below recent seasonal averages. According to the U.S. Energy Information Administration, distillate stocks totaled 107.2 million barrels for the week ending July 31, which is 3.5 million barrels less than the previous week. These figures 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, industry, and seasonal energy needs.
Despite a modest weekly decline, retail diesel prices have remained high. On August 10, the U.S. national average price hit $5.257 per gallon, down from $5.348 a week earlier, but still well above the $4.578 average recorded on July 6. Similarly, European fuel markets are experiencing pressure, with sharp increases in low-sulfur gasoil margins. The premium over crude oil reached a record $74.66 per barrel on July 30, as finished diesel became more valuable.
Refinery outages hinder global diesel supply
Several refinery disruptions have further constrained the availability of diesel for international markets. An attack damaged a refinery in Russia’s Tatarstan region, contributing to reduced processing activity in the country. Meanwhile, Saudi Arabia’s Jazan refinery has remained offline since July 27 following an earlier attack, removing another source of refined products from global trade. During June, refinery runs in multiple producing regions had already fallen below year-earlier levels, limiting the supply entering international markets.
Export restrictions have added to the tightness in refined-product flows. Russia extended restrictions on gasoline and diesel exports through January 31, 2027. Additionally, vessel traffic through the Strait of Hormuz has significantly decreased, impacting shipments from the Middle East. China has also reduced its refined fuel exports amid weakening domestic refinery activity. The European Central Bank reported diesel pump prices near €1.98 per litre in the third week of July, with higher refining margins playing a larger role in retail fuel costs.
US refinery activity remains vigorous despite low inventories
American refiners have processed substantial amounts of crude oil; however, diesel inventories have not recovered to normal seasonal levels. Crude input during the first seven months of 2026 reached the highest point since 2019 for that period. Refinery utilization rates have stayed robust as processing margins increased. Nonetheless, distillate stocks at the start of August are at their lowest for this time of year 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 approaching $89.81 a barrel and West Texas Intermediate around $84.08. Diesel costs are under increased pressure primarily because shortages are centered on finished fuel rather than crude supply alone. Diesel is essential for trucking, agriculture, construction, manufacturing, and other commercial sectors across both regions. The combination of low U.S. inventories, elevated European refining margins, refinery outages, and export restrictions continues to sustain a tight global market for diesel and other middle-distillates.