Diesel Becomes More Expensive Than Jet Fuel in Europe for First Time in Over a Year

Diesel fuel has become more expensive than jet fuel in Europe, a situation not seen in over a year. This price inversion highlights Europe's struggle to secure diesel supplies for its industrial and agricultural sectors. The continent is facing a tightening global market for diesel, exacerbated by Russia's ban on exports after Ukrainian attacks on its refineries.

Europe has managed to secure alternative jet fuel supplies from the United States and Nigeria, compensating for reduced shipments from the Middle East. This diversification has helped meet the continent's demand for aviation fuel. However, the diesel market presents a different challenge, with overall global supply shrinking.

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As we approach winter, we see a greater risk for diesel than for crude oil of prices remaining at levels reflecting scarcity.

Analysts at Goldman Sachs warned of a heightened risk for diesel prices to remain at levels reflecting scarcity as winter approaches. This contrasts with crude oil, where the situation might be less severe. The shift in supply dynamics is evident in import figures: European jet fuel imports reached their highest level since October 2025 in June, while diesel imports saw a significant drop in July compared to January.

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A brief period of cautious optimism in refined products markets was quickly halted by the resumption of hostilities in the Strait of Hormuz, the collapse of Russian oil product supply, and the ban on Russian diesel exports.

According to LSEG data, diesel prices have resumed their upward trend, driven by ongoing tensions with Iran and the disruption of Russian exports. These prices are now only 14% away from their April highs. Jet fuel prices have also risen but remain 25% below their March peaks. Karim Fawaz of S&P Global Energy attributed the market volatility to renewed hostilities in the Strait of Hormuz, reduced Russian oil product supply, and the diesel export ban.

Jay Maroo, an analyst at Sparta Commodities, anticipates that reduced demand for jet fuel after the summer travel season, coupled with expectations of increased European imports, will likely put downward pressure on its prices. This is in contrast to diesel, where supply constraints are expected to keep prices elevated.

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The decrease in demand for jet fuel after the seasonal summer travel peak, as well as the expectation of higher European imports, is likely to put pressure on prices.