European diesel prices have climbed 70% since the Middle East war began, and diesel in Europe now costs more than jet fuel for the first time in over a year. Refining capacity lost in the Middle East and Russia, not a shortage of crude, is driving the squeeze, and the fuel squeeze looks set to last for months even if the war ends.
Diesel in Europe now costs more than jet fuel for the first time in more than a year, according to Reuters data cited by Oilprice.com. That reversal has arrived even as Brent crude and West Texas Intermediate both trade below $100 a barrel, up by around $20 a barrel from pre-war levels.
Refining losses, not crude supply, drive the squeeze
European diesel prices have risen 70% since the war began, Reuters' Ron Bousso reported this week. In the United States, the diesel crack spread hit triple digits for the first time ever this week. The premium over crude prices reached as much as $102 a barrel on Monday before easing to about $100 a barrel on Tuesday.
Hostilities in the Middle East have knocked out as much as a fifth of the region's refining capacity, some 9.6 million barrels daily, according to the International Energy Agency. Ukrainian drone strikes on Russian refineries have meanwhile pushed Russia, the world's second-largest diesel exporter, to ban fuel exports and secure domestic supply, leaving the market for the fuel even tighter.
U.S. exports lean on shrinking stockpiles
The United States has ramped up fuel exports to an all-time weekly average high of 1.9 million barrels daily, supported by both higher refinery runs and inventory draws. Bank of America analysts said this week that those flows are draining already tight U.S. stockpiles, the only major hub still open for business, and stoking a global scramble for fuel that is pushing diesel cracks back toward record seasonal highs.
"Europe has a tremendous diesel problem," Eugene Lindell, head of refined products at consultancy FGE NexantECA, told Bloomberg earlier this month. Global refinery runs in Q2 2026 were 5.1 million barrels daily below last year's levels, even as demand fell by some 4 million barrels daily, leaving a supply gap of over 1 million barrels daily.
Inflation risk builds as winter approaches
Higher energy costs have already fed into inflation: U.S. consumer prices are up 3.4%. Eurozone prices are up 2.9% for the same reason. Demand for diesel typically climbs as the northern hemisphere turns colder, adding further strain just as inventories are being drawn down.
Even a sudden end to the Middle East war would not close the gap quickly. Refining capacity lost to the conflict and to Russia's export ban will take months to rebuild.
Source: Oilprice.com
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