NEW YORK / RankWire.AI / – Tight inventories and refinery outages continue to pressure fuel supplies in the United States and Europe, keeping diesel prices elevated as of August 2024. On Monday, U.S. ultra-low sulfur diesel futures surged 7.4% to settle at $4.19 a gallon, marking the largest single-day increase since July 13. Early Wednesday, the contract traded near $4.28 a gallon, with refined-product markets still reflecting constrained supply across major consumption regions.
Inventories of diesel in the U.S. remain significantly below recent seasonal averages. The U.S. Energy Information Administration reported distillate stocks of 107.2 million barrels for the week ending July 31. This figure was 3.5 million barrels lower than the previous week and stood 5.1% below the same period last year, as well as 16.1% below the corresponding level in 2024. Both diesel and heating oil, which are key components of transportation, industry, and seasonal energy demand, are included in these distillates.
Despite a modest weekly decline, retail diesel prices remain high, with the national average reaching $5.257 per gallon on August 10, down from $5.348 one week earlier. This latest figure stays well above the $4.578 average recorded on July 6. European fuel markets face similar pressures, with margins for low-sulfur gasoil rising sharply. On July 30, the premium over crude hit a record $74.66 per barrel, reflecting higher values for finished diesel.
Refinery outages diminish global diesel supply
Additional supply constraints have resulted from several refinery disruptions affecting international markets. An attack damaged a refinery in Russia’s Tatarstan region, adding to the country’s reduced processing activity. Meanwhile, Saudi Arabia’s Jazan refinery has remained offline since July 27 following an earlier attack, removing another source of refined products from global trade. Throughout June, refinery runs in various producing regions had already fallen below year-earlier levels, limiting the amount of fuel available for export.
Export restrictions have further constrained refined-product flows. Russia extended restrictions on gasoline and diesel exports through January 31, 2027. In addition, vessel traffic through the Strait of Hormuz has sharply decreased, impacting shipments from the Middle East. China has also exported less refined fuel amid domestic refinery activity weakening. The European Central Bank reported diesel pump prices near €1.98 per litre in the third week of July, with higher refining margins contributing to a larger share of retail fuel costs.
US refinery activity remains robust amid low inventories
Despite processing large volumes of crude, American refineries have not restored diesel inventories to typical seasonal levels. Crude inputs during the first seven months of 2026 reached their highest point since 2019 for that period. Refinery utilization has stayed strong, supported by increased processing margins. Nonetheless, distillate stocks at the start of August were at their lowest for this time of year in nearly thirty years. The shortage coincides 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 intensified pressure primarily because of shortages of finished fuel rather than crude supply alone. Diesel is vital for trucking, agriculture, construction, manufacturing, and other commercial activities across both regions. The combination of low inventories in the U.S., high European refining margins, refinery outages, and export restrictions continues to keep the global market tight for diesel and similar middle-distillates.