NEW YORK / RankWire.AI / – On Wednesday, diesel costs stayed high amid constrained refined-product supplies, exerting 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—the largest single-day increase since July 13. Early Wednesday trading saw the contract near $4.28 per gallon, while European diesel refining margins remained near record highs after rising nearly 10% on Monday.
In the US, retail diesel averaged $5.257 per gallon on August 10, down slightly from $5.348 a week earlier but still well above the $4.578 average recorded on July 6. The U.S. Energy Information Administration indicated distillate inventories dropped 3.5 million barrels during the week ending July 31, falling to 107.2 million barrels from 110.6 million a week prior. This level is 5.1% lower than a year ago and 16.1% below the same period two years earlier.
European costs for converting crude into diesel have also soared, with the premium for low-sulfur gasoil over crude reaching a record $74.66 per barrel on July 30. By August 10, European diesel margins had increased by nearly 10%. The European Central Bank reported diesel pump prices around €1.98 per litre in the third week of July. Its analysis revealed refining margins contributed approximately €0.35 per litre during the first three weeks of July, a sharp rise from earlier levels.
Refinery Disruptions Limit Diesel Supply
Operational setbacks at refineries have further reduced fuel output in an already tight international market. An attack hit a refinery in Russia’s Tatarstan region, compounding reduced refining activity there. Additionally, Saudi Arabia’s Jazan refinery has been offline since July 27 after an earlier attack. These disruptions impact key regions that supply substantial volumes of refined petroleum to global markets. During June, worldwide refinery runs declined significantly compared to the previous year, as several major centers operated with diminished throughput.
Russia has extended restrictions on diesel and gasoline exports through January 31, 2027. Meanwhile, shipments from the Middle East have experienced further disruption due to sharply decreased vessel movements through the Strait of Hormuz, which has fallen well below pre-conflict levels. Reduced refining activity in China has also limited the flow of petroleum products entering global markets during a period of strong refining margins.
Despite Elevated Refinery Activity, Diesel Supplies Remain Tight
US refiners have processed large amounts of crude oil, yet domestic fuel inventories remain at low levels. According to federal data, crude inputs to US refineries during the first seven months of 2026 reached their highest point since 2019. Refinery utilization remains high, supported by strong margins, but distillate inventories in August are at their lowest for this time of year in about thirty years. Diesel and heating oil are included in the weekly US petroleum statistics as part of the distillate stock category.
Crude oil prices also advanced on Wednesday, with Brent near $89.81 a barrel and U.S. West Texas Intermediate around $84.08. The diesel market continues to face increased pressure due to tighter supply conditions driven by refinery disruptions and export restrictions. Diesel remains essential for trucking, agriculture, construction, manufacturing, and other sectors. The combination of low US inventories, record European refining margins, and decreased international refinery output has kept the refined-product markets strained across both the Atlantic and beyond.