Diesel prices overtake jet fuel in Europe as global shortage widens

• European jet fuel imports rose to 750,000 barrels per day in June (highest since October 2025) while diesel imports dropped to 1.56 million bpd in July from 1.97 million bpd in January
• Diesel prices are now 14% below April peaks while jet fuel prices remain 25% below March records, with jet fuel trading at a $24/ton discount to gasoil futures as of August 10
• Goldman Sachs warns of 'higher risk of persistent scarcity pricing in diesel than in crude heading into winter' due to Russian export ban and Iranian war-related supply disruptions

SUMMARY

For the first time in over a year, diesel prices in Europe have surpassed jet fuel prices as a global diesel shortage intensifies, according to LSEG data. This price inversion reflects Europe's struggle to secure adequate diesel supplies for industry and agriculture while successfully sourcing alternative jet fuel imports.

Key Developments:

European diesel imports dropped to 1.56 million barrels per day (bpd) in July from 1.97 million bpd in January. Meanwhile, jet fuel imports surged to 750,000 bpd in June—the highest since October 2025—maintaining similar levels in July from 612,000 bpd in January.

Supply Disruptions:

The diesel shortage stems from multiple factors: Russia's diesel export ban following Ukrainian attacks on its refineries, and disruptions from the Iran war affecting Middle Eastern crude and fuel supply. These pressures have pushed diesel prices to just 14% below their April peaks, while jet fuel remains 25% below March highs.

Market Dynamics:

Jet fuel cargoes are now trading at a $24 per metric ton discount to gasoil futures as of August 10—the widest discount since July 2025, down sharply from a $500 per barrel premium during the March peak of the Iran war. Europe has successfully sourced jet fuel from the U.S. and Nigeria to offset Middle Eastern shortfalls.

Outlook:

Goldman Sachs analysts warn of "higher risk of persistent scarcity pricing in diesel than in crude heading into winter." Weakening seasonal jet demand post-summer and expectations of higher European imports are weighing on jet fuel prices, according to Sparta Commodities analyst Jay Maroo.