LONDON, UK: Diesel supplies are under mounting pressure across major markets, with prices reaching record highs in Europe and the United States as the wars in Iran and Ukraine disrupt exports from major producers including Russia, Saudi Arabia and the United Arab Emirates.

European diesel futures closed at an all-time high last week, more than doubling since the beginning of 2026. Supply disruptions have also spread to the Red Sea, where Saudi Arabia loads most of its diesel.

The wars in the Middle East and Ukraine have damaged oil refineries in the regions, while refineries elsewhere are working hard to produce fuels. U.S. refineries, for example, operated at their 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 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 averaged 800,000 barrels per day between March and August, half their level a year earlier, according to Kpler shipping data. The region supplied nearly 41 percent of Europe's diesel imports in 2025.

"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, the world's second-largest diesel exporter after the United States, banned diesel exports in July after Ukrainian drone attacks cut refinery production. Before the ban, Russia supplied significant volumes to Turkey and Brazil, which have since sought alternative supplies.

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

U.S. average retail diesel prices climbed above US$6 a gallon for the first time on record this month. Inventories remain below normal seasonal levels despite refiners operating near full capacity. Stocks rose by about 600,000 barrels last week to 96.97 million barrels but remained nearly 15 percent below the five-year average for the second week of September.

Asian diesel prices are also elevated due to disruptions in Middle Eastern and Russian supplies and are near record levels. Benchmark Asian diesel swaps stood at around $180 a barrel on September 18, down from a March record of more than $200 but still twice pre-war levels.

China's diesel exports fell 26 percent in April-June from a year earlier following a government decision to limit refined-product exports. Shipments recovered in August to their highest level in nearly 2.5 years, reaching 320,000 barrels per day and resulting in lower domestic stocks.