NEW YORK / RankWire.AI / – On Wednesday, diesel prices stayed elevated due to limited inventories and refinery outages impacting fuel availability in the United States and Europe. U.S. ultra-low sulfur diesel futures surged 7.4% on Monday, closing at $4.19 per gallon, marking the largest single-day gain since July 13. Early Wednesday, the contract traded close to $4.28 a gallon as refined-product markets continued to reflect constrained supplies across major consumption regions.
Inventories of diesel in the U.S. remain significantly below recent seasonal averages. According to the U.S. Energy Information Administration, distillate stocks stood at 107.2 million barrels for the week ending July 31, which is 3.5 million barrels lower than the previous week. Additionally, inventories are down 5.1% compared to the same period last year and are 16.1% below the corresponding level in 2024. Distillates, including diesel and heating oil, are essential for transportation, industry, and seasonal energy demand.
Despite a modest weekly decline, retail diesel prices continue to stay high. The national average in the U.S. reached $5.257 per gallon on August 10, a decrease from $5.348 the week before. Still, this figure remains well above the $4.578 recorded on July 6. European fuel markets face similar challenges, with sharp increases in low-sulfur gasoil margins. On July 30, the premium over crude oil hit a record $74.66 a barrel as finished diesel commanded higher prices in the market.
Refinery disruptions diminish global diesel supplies
Multiple refinery outages have further constrained diesel availability for international markets. A refinery in Russia’s Tatarstan region was damaged in an attack, compounding already reduced processing activity within the country. Since July 27, Saudi Arabia’s Jazan refinery has remained offline after an earlier attack, removing a key source of refined products from global trade. In June, refinery runs across various producing regions declined below the levels seen a year earlier, limiting the fuel supply entering international markets.
Export restrictions have further restricted refined-product flow. Russia extended its gasoline and diesel export bans through January 31, 2027. Meanwhile, vessel traffic through the Strait of Hormuz from the Middle East has significantly decreased. China’s domestic refinery activity has weakened, resulting in fewer refined fuels supplied abroad. The European Central Bank noted that diesel pump prices in the third week of July were near €1.98 per litre, with higher refining margins contributing to increased retail fuel costs.
US refining activity remains robust while inventories stay low
In the U.S., refiners have processed substantial amounts of crude oil; however, diesel inventories have not reached typical seasonal levels. Crude inputs during the first seven months of 2026 hit their highest point since 2019 for that period. Refinery utilization rates stayed high as processing margins grew. Despite this, distillate stocks at the start of August were at their lowest point for this time of year in about thirty years. This inventory shortfall coincides with reduced product flows from several overseas refining centers.
Crude oil prices also increased on Wednesday, with Brent near $89.81 a barrel and West Texas Intermediate around $84.08. The pressure on diesel prices remains intensified by shortages of finished fuels rather than crude supply alone. Diesel fuels vital sectors such as trucking, agriculture, construction, and manufacturing across both regions. Ongoing low inventories in the U.S., elevated European refining margins, refinery outages, and export restrictions continue to sustain a tight global market for diesel and other middle-distillate fuels.