European diesel margins hit a record on Tuesday as tight global supply conditions pushed refining margins to unprecedented levels. Low-sulphur gasoil futures traded at a premium of $76.08 per barrel over Brent crude at 1627 GMT, up $2.69 from the previous session, according to market data.
The margin peaked at $76.42 per barrel earlier in the day, surpassing the prior record. In the United States, the diesel crack spread—a key refining profitability gauge—reached a record high of $102.20 per barrel on Monday, underscoring the widespread tightening in distillate markets.
Analysts attributed the surge to supply disruptions from the Middle East and Russia, which have constrained global diesel availability. Middle East export flows remain disrupted, while Russian refinery operations have persisted despite sanctions, further tightening the market. The situation coincides with peak agricultural consumption season, exacerbating demand pressures.
China’s refined oil product exports fell 12.9% year-on-year in July but rose 6.7% month-on-month, according to customs data released Tuesday. Diesel exports surged 88% from June to 810,000 metric tons, returning to levels seen in July 2023 and running about 50% above the prior-year monthly average. The easing of export restrictions has allowed Chinese refiners to redirect surplus fuel to global markets, partially offsetting supply shortfalls elsewhere.
Geopolitical tensions in Iran and Ukraine have also contributed to broader supply disruptions, compounding the strain on diesel markets. The combination of constrained supply from key producing regions and seasonal demand strength has driven refining margins to historic highs across Europe and the U.S.
