NEW YORK / RankWire.AI / – On Wednesday, diesel costs continued to stay high due to constrained inventories and refinery outages impacting fuel availability in both the United States and Europe. U.S. ultra-low sulfur diesel futures surged 7.4% on Monday, closing at $4.19 a gallon, marking the largest single-day increase since July 13, with the contract trading near $4.28 early Wednesday as markets for refined products persisted in reflecting limited supplies across key consuming regions.
The U.S. is experiencing diesel inventories that remain significantly below recent seasonal averages. According to the U.S. Energy Information Administration, the weekly distillate stocks as of 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 figure in 2024. Distillates, which include diesel and heating oil, are vital for transportation, industrial operations, and seasonal energy needs.
Retail diesel prices have remained elevated despite a slight decline over the past week. The national average in the U.S. hit $5.257 per gallon on August 10, down from $5.348 recorded a week earlier, yet still considerably above the $4.578 average noted on July 6. European fuel markets are under similar pressure, with sharp increases in low-sulfur gasoil margins, pushing the premium over crude oil to a record $74.66 per barrel on July 30 as the value of finished diesel climbed.
Refinery disruptions diminish global diesel availability
Multiple refinery outages have further restricted the global supply of diesel accessible to international markets. A recent attack caused damage to a refinery in Russia’s Tatarstan region, compounding already reduced processing activity within the country. Additionally, Saudi Arabia’s Jazan refinery has remained shut since July 27 following an earlier attack, removing another source of refined fuels from global trade channels. During June, refinery runs across various producing regions had already declined below the levels seen a year earlier, limiting the flow of fuel into the international market.
Furthermore, export restrictions have added pressure on refined product supplies. Russia has extended restrictions on gasoline and diesel exports through January 31, 2027, and vessel traffic through the Strait of Hormuz from the Middle East has decreased markedly. Meanwhile, China has exported fewer refined fuels as domestic refinery activity weakened. The European Central Bank noted that diesel pump prices in the third week of July approached €1.98 per litre, with higher refining margins making up a larger share of retail fuel costs.
High refinery activity persists in the US despite low inventories
In the United States, refiners have processed significant volumes of crude oil, yet diesel stockpiles have not rebounded to typical seasonal levels. The crude input for the first seven months of 2026 reached the highest point for that period since 2019. Refinery utilization rates have remained robust as processing margins have increased, but distillate inventories at the start of August are at their lowest point for this time of year in nearly thirty years. The inventory deficit coincides with decreased product flows from several overseas refining centers.
Crude oil prices also saw gains on Wednesday, with Brent nearing $89.81 a barrel and West Texas Intermediate around $84.08. The pressure on diesel prices is primarily driven by shortages of finished fuel rather than crude supply alone. Diesel supports sectors such as trucking, agriculture, construction, manufacturing, and other commercial activities across both regions. Persistent low inventories in the U.S., high European refining margins, refinery outages, and export restrictions all contribute to a tightly balanced global market for diesel and other middle-distillate fuels.