Global diesel prices hit record highs, further rises possible

• US retail diesel prices exceeded $6 per gallon for the first time on record this month, with inventories 15% below the five-year average despite refineries running at their highest utilization in eight years
• Middle East diesel exports dropped by half compared to year-earlier levels, averaging 800,000 barrels per day, particularly impacting Europe which received 41% of its diesel imports from the region in 2025
• European diesel futures more than doubled since the beginning of 2026 to all-time highs, while Asian diesel prices remain near record levels at around $180 per barrel, twice pre-war values

Global Diesel Prices Hit Record Highs on Supply Disruptions

Key Developments:

Global diesel prices have surged to record levels due to severe supply disruptions from wars in Iran and Ukraine. European diesel futures closed at all-time highs last week, more than doubling since the beginning of 2026. U.S. retail diesel prices exceeded $6 per gallon for the first time on record this month.

Supply Disruptions:

Middle East diesel exports plummeted by half during March-August, averaging just 800,000 barrels per day compared to the previous year, according to Kpler data. The region previously supplied 41% of Europe's diesel imports in 2025. Wars have damaged refineries in the Middle East, while Red Sea disruptions threaten Saudi Arabian exports.

Russia, the world's second-largest diesel exporter, banned diesel exports in July following Ukrainian drone attacks on refineries, eliminating a major supply source for Turkey and Brazil.

Market Conditions:

European diesel stocks at the Amsterdam-Rotterdam-Antwerp hub hit their lowest seasonal level on September 10. U.S. diesel inventories stand at 96.97 million barrels, approximately 15% below the five-year average, despite refineries operating at their highest capacity in eight years.

Asian diesel prices remain near record levels at around $180 per barrel on September 18, double pre-war values. China's diesel exports fell 26% year-over-year in April-June before recovering to a 2.5-year high of 320,000 bpd in August.

Outlook:

The International Energy Agency warns that global refineries are already stretched to capacity, leaving few options to prevent further supply tightening and price increases in coming months. Any additional Red Sea disruptions could exacerbate the already strained global diesel market.