Diesel Prices Skyrocket, Leaving Europe in Turmoil

Although most private vehicles do not run on diesel, its price plays a vital role in our daily lives. This is because almost the entire engine of the economy—from delivering groceries to supermarkets and distributing agricultural produce to construction processes and manufacturing industries—relies heavily on diesel-powered vehicles, such as trucks and heavy machinery.

Consequently, diesel shortages or price shocks can have a much larger economic impact than petrol price increases, as they drive up the costs of goods delivery and heavy machinery operations. As businesses face increasing pressure, these higher energy costs are passed on to consumers, exacerbating the cost-of-living crisis and rising inflation. So, what exactly is driving global diesel prices so high?

The US blames Ukraine for the diesel crisis

The United States and China are the two largest diesel producers in the world. China retains most of its production for domestic consumption, leaving the US as the world’s largest diesel exporter. However, the average weekly price for a gallon of diesel in the US has now reached $6.52, according to the US Energy Information Administration (EIA). This represents a massive surge compared to last year’s average of approximately $3.74 per gallon, or $3.53 per gallon two years ago.

US President Donald Trump recently requested that the President of Ukraine cease attacks on Russian oil refineries “because it is causing diesel shortages.” Russia is one of the world’s other major diesel suppliers. However, since 2022, several of its refineries have been attacked up to 15 times, according to the International Energy Agency (IEA). The IEA estimates that Russian diesel production has fallen by nearly 30% from 2025 levels. Moscow has now restricted diesel exports to protect its domestic supply.

As Russian production declines, the US is moving quickly to help cover the deficit, but these efforts remain insufficient. On 22 September, Trump announced that his administration is also considering implementing a diesel export ban. This move is likely an attempt to lower domestic prices ahead of the November midterm elections, given that energy prices and affordability have become critical campaign issues. Leading energy lobby groups oppose the plan, and many industry experts argue that a ban would be slow to lower prices or could even backfire by encouraging US refineries to reduce production, thereby raising prices.

Europe is highly vulnerable to diesel shocks

For Europe, the consequences of increasingly expensive diesel could be dramatic. “Decades of incentive policies, such as tax advantages, have made European vehicle fleets far more dominated by diesel compared to regions like the US,” said Georg Zachmann, a senior researcher at the Brussels-based think tank Bracing. “As a result, the EU structurally experiences a petrol surplus that is exported, but a diesel deficit that must be imported,” added Zachmann, who specialises in energy and climate policy.

In the EU, just over 38% of passenger cars use diesel, and land transport—including freight—accounts for 77% of total diesel and gas oil consumption, according to a summary report by the Brussels-based advocacy group Transport & Environment. This dependence on diesel-powered transport “makes drivers and businesses highly vulnerable to oil and fuel price shocks,” wrote Juliette Egal, the report’s lead author.

The NGO estimates that EU drivers have had to pay €30 more for a 50-litre diesel tank since the start of the war in Ukraine. On average, a long-haul truck driver from Germany must spend an additional €236 per week. The increase in fuel costs for EU land transport has reached up to €270 million per day—of which €203 million comes from diesel, according to the report. Overall, the EU economy has incurred additional costs of €40 billion due to diesel prices for land transport since the start of the war.

Why are diesel prices rising faster than oil?

In the short term, the volume of Russian crude oil processing is the single fastest-moving variable, said Skip York, a non-resident researcher at the Center for Energy Studies at Rice University, Houston, Texas. “Every new wave of Ukrainian attacks directly impacts diesel prices within days, unlike the Strait of Hormuz, where flows are low but relatively stable for months,” he added.

Surprisingly, crude oil production—the raw material needed to make diesel and petrol—is not the biggest constraint, York noted. This explains why oil prices move moderately while diesel prices skyrocket. “The oil bottleneck has shifted from a ‘lack of crude oil’ in March/April to a ‘lack of refinery capacity’ since August,” the expert told DW. Now, disruptions to oil refineries have become the most crucial factor, as indiscriminate attack campaigns by both Ukraine and the Hormuz conflict are crippling refinery capacity faster than anyone can replace it.