Diesel prices surpass jet fuel in Europe as global supply tightens

Diesel cargoes are trading at a premium to jet fuel in Europe for the first time in more than a year, as tightening diesel supplies and rising imports of aviation fuel reshape the region's refined products market, reported Reuters.

Europe has been able to offset lower Middle Eastern jet fuel shipments by importing cargoes from the United States and Nigeria after the Iran conflict disrupted crude and fuel supplies. Diesel, however, remains in short supply as Russia's export disruptions continue to affect availability for industry and agriculture.

Read more: Why the US-Iran war continues to disrupt oil markets



"We see a higher risk of persistent scarcity pricing in diesel than in crude heading into winter," analysts at Goldman Sachs told Reuters.

Jet fuel imports rise, diesel imports fall

Europe imported around 750,000 barrels per day (bpd) of jet fuel in June, the highest level since October 2025, and maintained a similar pace in July. That compares with 612,000 bpd in January, according to Kpler.

Diesel imports, meanwhile, declined to 1.56 million bpd in July from 1.97 million bpd at the start of the year. The tighter supply has pushed diesel prices above jet fuel this week, LSEG data showed.

Supply disruptions support diesel prices

Diesel prices have rallied in recent weeks as Iran peace talks remain stalled and Russian fuel exports have been disrupted following Ukrainian attacks on refineries. Prices are now only 14% below their April peak.

Jet fuel has also recovered, but remains 25% below its March record as stronger imports and softer seasonal demand limit further gains.

"A brief period of cautious optimism for refined product markets has been quickly overtaken by renewed hostilities in the Strait of Hormuz, the collapse of Russian product supply and a diesel exports ban," said Karim Fawaz of S&P Global Energy.

Jet fuel loses ground after summer travel season

Jet fuel has also weakened relative to European gasoil futures, the benchmark used to price it. On August 10, imported jet cargoes were assessed at a discount of $24 per metric ton to gasoil futures, the widest discount since July 2025, according to LSEG and Argus Media.

At the height of the Iran conflict in March, jet fuel had traded at a premium of more than $500 per barrel over the benchmark.

Jay Maroo, an analyst at Sparta Commodities, said weakening demand after the summer travel season and expectations of higher European jet fuel imports are likely weighing on prices.