NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed elevated because of limited inventories and refinery disruptions in the United States and Europe. U.S. ultra-low sulfur diesel futures surged 7.4% on Monday, closing at $4.19 a gallon. This was the largest single-day increase since July 13. Early Wednesday, the contract traded close to $4.28 a gallon as refined-product markets continued to reflect constrained supply across key consuming regions.
U.S. diesel stocks remain well below recent seasonal averages. The U.S. Energy Information Administration reported 107.2 million barrels of distillate stocks for the week ending July 31. This figure was 3.5 million barrels lower than the previous week. Compared to the same period last year, inventories are down 5.1%, and they are 16.1% below the level recorded in 2024. Distillates include diesel and heating oil, both essential for transportation, industry, and seasonal energy needs.
Retail diesel prices also remain high, despite a slight weekly decline. The national average in the U.S. reached $5.257 per gallon on August 10, down from $5.348 the previous week. Still, this price is well above the $4.578 average seen on July 6. In Europe, fuel markets face similar challenges, with low-sulfur gasoil margins rising sharply. The premium over crude hit a record $74.66 per barrel on July 30, as finished diesel became more valuable.
Refinery outages hinder global diesel availability
Multiple refinery disruptions have further reduced the global supply of diesel available to international markets. An attack damaged a refinery in Russia’s Tatarstan region, contributing to lower processing activity in the country. Saudi Arabia’s Jazan refinery has been offline since July 27 after an earlier attack. This shutdown has taken another source of refined products out of the global trade. During June, refinery runs in several producing regions had already fallen below last year’s levels, limiting the amount of fuel entering international markets.
Export restrictions have added more pressure. Russia extended restrictions on gasoline and diesel exports through January 31, 2027. Vessel traffic through the Strait of Hormuz has also fallen sharply, affecting shipments from the Middle East. China has supplied fewer refined fuels as domestic refinery activity slowed. The European Central Bank noted diesel pump prices near €1.98 per litre in the third week of July, with higher refining margins making up a larger share of retail fuel costs.
US refinery activity remains robust despite low inventories
Refiners in the U.S. processed large volumes of crude oil, but diesel inventories are still below normal seasonal levels. Crude inputs in the first seven months of 2026 were the highest since 2019 for that period. Refinery utilization rates stayed strong as processing margins improved. However, distillate stocks at the start of August were at their lowest point for this time of year in nearly thirty years. The inventory shortages coincide 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. Diesel prices face increased pressure mainly because of shortages in finished fuel rather than crude oil supply alone. Diesel supports trucking, agriculture, construction, manufacturing, and other commercial sectors across both regions. Ongoing low U.S. inventories, high European refining margins, refinery outages, and export restrictions continue to keep the global diesel market tight.