Global diesel prices hit record highs, further rises possible

A pump attendant fills vehicles with fuel at a gas station in Paco, Manila, on January 12, 2026, as prices are set to rise again.

Rappler

Refineries worldwide are operating at maximum capacity, with the US experiencing record retail diesel prices and low inventory levels, indicating a tight global diesel market

AT A GLANCE

• Diesel prices have surged to record highs in Europe and the US due to supply disruptions from conflicts in Iran and Ukraine, with European futures more than doubling since early 2026.
• China's diesel exports have fluctuated, initially declining due to government restrictions but recovering significantly in August, impacting global supply dynamics.

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LONDON, UK – Diesel prices have rallied to record highs in Europe and the United States and are near record levels in Asia as wars in Iran and Ukraine disrupt supplies from major producers including Russia, Saudi Arabia and the United Arab Emirates, leaving few options to prevent further gains.

Diesel futures in Europe closed at an all-time high last week, having more than doubled from their level at the beginning of 2026, after supply disruptions spread to the Red Sea, where Saudi Arabia loads most of its diesel.

In Asia, diesel prices are elevated as a result of Middle East and Russian supply disruptions and close to record levels.

Asian diesel prices eased from the March record high of more than $200 a barrel, hovering at around $180 a barrel on September 18. 

Current levels are still twice the pre-war values.

China’s lower diesel exports in the aftermath of the Iran war likely tightened global supplies, as the country’s shipments declined by 26% in April-June from a year earlier due to a government decision to limit refined product exports.

But China’s diesel exports recovered to reach their highest in nearly 2.5 years in August at 320,000 bpd, resulting in lower domestic stocks.

The wars in the Middle East and Ukraine have damaged oil refineries in the region, and refineries elsewhere are working hard to make fuels. In the United States, for example, refineries operated at the highest level in eight years in late August, according to the International Energy Agency.

“A key issue is that many refineries around the world are already stretched to capacity,” the International Energy Agency said in a newsletter on Monday, September 21. “This leaves few available options to prevent a further tightening of supplies and higher prices in the coming months.”

Middle East diesel exports halved from March to August compared to a year earlier, averaging 800,000 barrels per day, according to shipping data from Kpler. The Middle East supplied nearly 41% of Europe’s diesel imports in 2025, Kpler data showed.

“Any further disruption to Red Sea flows risks tightening an already stretched global diesel market,” said Kpler analyst George Shaw, adding that global diesel markets remain vulnerable as refining capacity continues to be the key pinch point.

Russia’s refineries attacked, diesel exports banned

Russia banned diesel exports in July as Ukrainian drone attacks cut Russian refinery production.

Ukraine and Russia have continued attacks on each other’s energy infrastructure despite an announcement by US President Donald Trump last week that they had agreed to stop. Ukrainian President Volodymyr Zelenskiy said on Sunday, September 20, he will meet with Trump in the coming days.

Russia, the world’s second-biggest diesel exporter after the United States, supplied significant volumes of diesel to Turkey and Brazil before the ban, prompting such importers to seek alternative supplies since then.

In Europe – historically a net importer of diesel – stocks at the key refining and storage hub of Amsterdam-Rotterdam-Antwerp were at their lowest level for this time of the year on September 10, according to data from Insights Global.

US retail diesel price hits record high

In the US, average retail diesel prices climbed above $6 a gallon for the first time on record this month.

Inventories remain below normal seasonal levels, even as refiners have been running near full tilt. Although diesel stocks rose by roughly 600,000 barrels last week, at 96.97 million barrels they remain nearly 15% below the average for the last five years for the second week in September. – Rappler.com