NEW YORK / RankWire.AI / – Fuel prices, particularly for diesel, have stayed at elevated levels on Wednesday due to constrained inventories and refinery outages impacting supplies in the United States and Europe. On Monday, U.S. Energy Information Administration reported that U.S. ultra-low sulfur diesel futures increased by 7.4%, closing at $4.19 per gallon. This marked the most significant single-day rise since July 13. Early Wednesday, the contract traded near $4.28 a gallon as markets for refined products continued to signal limited supply across major consumption regions.
The stock of diesel in the U.S. remains notably below recent seasonal averages. For the week ending July 31, the EIA recorded distillate stocks at 107.2 million barrels, a decrease of 3.5 million barrels from the previous week. These inventories are also 5.1% lower than the same period last year and 16.1% beneath the comparable figure in 2024. Distillates include diesel and heating oil, both critical for transportation, industrial activities, and seasonal energy needs.
Despite a modest weekly decrease, retail diesel prices have remained high. The national average hit $5.257 a gallon on August 10, down from $5.348 a week earlier, but still significantly above the $4.578 average recorded on July 6. Similar pressures are evident in Europe, where low-sulfur gasoil margins have surged sharply. The premium over crude oil reached a record $74.66 a barrel on July 30, as refined diesel gained higher valuation.
Refinery outages exacerbate global diesel shortages
Multiple refinery disruptions have further diminished the available supply of diesel for international markets. An attack damaged a refinery in Russia’s Tatarstan region, compounding the country’s reduced processing activity. Meanwhile, Saudi Arabia’s Jazan refinery has remained offline since July 27 after an earlier attack, eliminating another source of refined products from global trade. During June, refinery runs in various producing regions had already fallen below the levels seen a year earlier, restricting the flow of fuel into international markets.
Export restrictions have added further constraints to the movement of refined fuels. Russia extended restrictions on gasoline and diesel exports through January 31, 2027. Additionally, vessel traffic through the Strait of Hormuz has decreased sharply for shipments from the Middle East. Domestic refinery activity in China has weakened, resulting in lower supplies of refined fuels. The European Central Bank indicated that diesel pump prices approached €1.98 per litre in the third week of July, with higher refining margins accounting for a larger share of retail fuel costs.
US refining capacity remains strong while inventories stay low
American refineries have processed large quantities of crude oil, yet diesel stocks have not returned to typical seasonal levels. Crude intake during the first seven months of 2026 was at its highest since 2019 for that period. Refinery utilization rates have stayed high, supported by increased processing margins. Nonetheless, distillate inventories at the start of August are at their lowest point for this time of year in nearly thirty years. The ongoing inventory shortage is also linked to reduced product flows from several overseas refining centers.
Crude oil prices also moved upward Wednesday, with Brent nearing $89.81 a barrel and West Texas Intermediate around $84.08. Diesel prices have faced increased pressure mainly because shortages are centered on finished fuel rather than crude supply alone. Diesel supports sectors like trucking, agriculture, construction, manufacturing, and other commercial activities across both regions. Persistent low U.S. inventories, elevated European refining margins, refinery outages, and export restrictions continue to sustain a tight global market for diesel and other middle-distillate fuels.