Diesel prices have climbed to record levels in Europe and the US as wars and refinery disruptions cut supplies from some of the world’s biggest fuel-producing regions. The shortage has pushed up costs for transport, farming and manufacturing, with the market expected to remain tight in the months ahead.
European diesel futures have more than doubled since the start of 2026, reaching an all-time high last week. Middle Eastern diesel exports fell by half between March and August compared with a year earlier, leaving international buyers with fewer supplies.
The disruption has been particularly severe in the Middle East. Damage to refineries and problems affecting shipping routes have reduced fuel exports, while the Red Sea has become an increasingly important alternative route for Saudi Arabia’s diesel shipments.
The situation is also being worsened by lower Russian supplies. Russia, one of the world’s biggest diesel exporters, banned diesel exports in July after Ukrainian attacks reduced refinery output. The restriction has forced traditional buyers to search for supplies elsewhere, adding pressure to the international market.
Refineries in other countries are trying to fill the gap, but there is little spare capacity left. US refineries were operating at their highest level in eight years in late August, according to the International Energy Agency. With many plants already running close to full capacity, there is limited room to increase production if another major disruption occurs.
The United States is already feeling the impact. Average retail diesel prices crossed $6 a gallon this month for the first time, while inventories remain well below normal seasonal levels. US diesel stocks stood at 96.97 million barrels in the second week of September, nearly 15% below the five-year average for that period.
The latest figures point to a prolonged supply problem. US diesel inventories fell to 107.9 million barrels by September 11, the lowest level for that time of year since records began in 1982, according to the US Energy Information Administration. The EIA expects inventories to remain below the five-year low through much of 2027.
The shortage is also visible in the storage market. Diesel storage capacity available for lease in North America and the Caribbean has risen to about 13 million barrels for October, up from 11 million barrels in June. Industry participants say this is partly because traders have less fuel available to put into storage and are therefore reluctant to renew storage contracts.
Europe is facing similar pressure. Diesel stocks at the Amsterdam-Rotterdam-Antwerp trading and storage hub were at their lowest seasonal level in September, while Asian prices remain close to record highs. The Asian diesel benchmark was around $180 a barrel on September 18, roughly twice its pre-war level.
China has provided some relief by increasing diesel exports in recent months. Its shipments reached their highest level in nearly two and a half years in August. However, exports had fallen sharply earlier in the year after Beijing restricted refined fuel shipments to protect domestic supplies.
The diesel shortage matters because the fuel powers much of the global economy. Trucks carry food and consumer goods, while diesel is widely used by farmers, construction companies, factories and heavy machinery operators.
Higher diesel prices can therefore spread through the economy. Transport companies face larger fuel bills, farmers pay more to operate machinery and manufacturers face higher logistics costs. Businesses may eventually pass some of these expenses on to consumers through higher prices.
The pressure could become more visible during the winter months, when demand for heating fuels rises and refineries typically undergo seasonal maintenance. US buyers are also expected to build diesel supplies ahead of the winter heating season, potentially adding further pressure to prices.
There are some possible sources of relief. Higher refining margins could encourage producers to increase output, while stronger Chinese exports may add more fuel to international markets. A reduction in disruptions to Middle Eastern shipping could also improve supplies.
But the market remains vulnerable. Any fresh attacks on refineries, prolonged restrictions on Russian exports or further disruption to Middle Eastern shipping could push diesel prices even higher.
Industry indicators suggest the global diesel shortage may continue into 2027. With inventories already low and refineries operating close to their limits, the fuel market has little room to absorb another major supply shock.
The record prices are therefore becoming more than an energy-market issue. They are increasingly a concern for freight, food, manufacturing and inflation, making the global diesel shortage an important economic pressure point in the months ahead.