Diesel Just Hit $200 a Barrel in Europe — Here’s Why It Could Get Worse

TLDR

• European diesel futures surged nearly 10% to over $200/bbl, the highest since 2022
• The Strait of Hormuz closure has cut off refined fuel shipments from the Middle East
• Europe imports much of its diesel and could face shortages within weeks
• U.S. diesel has crossed $4/gallon; Asia briefly hit $200/bbl too
• Russian refinery drone strikes add further pressure to global diesel supply

European diesel futures hit their highest level since 2022 on Thursday, surging nearly 10% in London trading to as high as $1,498 per ton. That works out to more than $200 per barrel.

The spike comes as the Iran war has brought traffic through the Strait of Hormuz to a near standstill. The strait is one of the world’s most critical chokepoints for energy shipments. Its closure has cut off millions of barrels of refined fuel from global markets.

Diesel prices have risen faster than crude oil since the conflict began. That gap reflects how the disruption is hitting refined products especially hard.

Europe is structurally short on diesel. The region produces less than it consumes and depends on imports to make up the difference. With Middle Eastern supplies cut off, European buyers have been forced to look elsewhere for cargoes.

That shift has triggered a bidding war among buyers. Diesel shipments are being rerouted over longer distances, raising costs and stretching supply chains.

Analysts are warning that Europe could face fuel shortages within weeks if the Strait of Hormuz is not reopened. Latin America is expected to face similar supply pressure.

Rising Prices Across Global Markets

The price surge is not limited to Europe. Diesel in the United States has crossed $4 per gallon. Asian markets also briefly touched $200 per barrel, according to Bloomberg data.

The United States Oil Fund and related ETFs, which track crude oil prices, have moved in response to the broader energy disruption.

Russia Supply Under Pressure Too

Russian ports and refineries, which are normally a major source of diesel exports to global markets, have come under increased drone attacks from Ukraine. The strikes have intensified since the United States relaxed sanctions on Russia.

Russia is one of the world’s largest diesel exporters. Damage to its refining infrastructure threatens to remove another supply source from an already stretched market.

The combination of Hormuz disruptions and Russian refinery damage has left traders with fewer options and higher costs.

The benchmark European diesel contract closed Thursday at $1,493.25 per ton in London, up 9.5% on the day, according to market data.

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