Global diesel prices surge amid refining margin spikes and supply crises

Global diesel prices are experiencing significant volatility and upward pressure, driven by a combination of tightening refining margins and geopolitical supply disruptions. While crude oil prices have moderated, the cost of diesel remains high because the refining margin—the cost to convert crude into usable fuel—has widened significantly. In mid-2026, the 3-2-1 crack spread reached approximately $70 per barrel, far exceeding its long-run average of $10 to $16.

Supply constraints are being exacerbated by geopolitical tensions and regulatory shifts. The closure of the Strait of Hormuz following a breakdown in truces has halted the transit of millions of barrels of oil daily. Additionally, Russia’s diesel export ban and attacks on its refineries have further constrained the market. These factors have caused global diesel exports to plunge by 1.3 million barrels per day compared to the previous year.

In Europe, these pressures have forced diesel prices to surpass jet fuel prices for the first time in over a year. Although some regions have secured alternative jet fuel supplies from the United States and Nigeria, the diesel market remains under intense pressure due to reduced refinery processing levels and a global supply squeeze.