The global diesel market tightened sharply in July as Russia’s diesel export ban and refinery outages reduced supplies, pushing European refining margins to multi-year highs, according to the OPEC’s August 2026 Monthly Oil Market Report.
The gasoil crack spread in Rotterdam against Brent, a key measure of diesel refining profitability, jumped $27.17 a barrel from June to an average $72.45 in July, its strongest performance among the products and trading hubs tracked by OPEC. The spread was also $44.14 a barrel higher than a year earlier.
OPEC attributed the increase to Russia’s diesel export ban and escalating refinery outages, which reduced supplies in an already-tight European market. Amsterdam-Rotterdam-Antwerp, or ARA, gasoil inventories also fell to multi-year lows during the month.
The developments have lifted the economics of refining diesel at a time when global middle-distillate markets are already facing tighter balances.
European Diesel Market Under Pressure
Rotterdam refining margins rose sharply in July, with diesel leading the increase as declining inventories, disruptions to refining capacity in Eastern Europe and diesel export restrictions tightened regional supplies.
OPEC said uncertainty surrounding product flows through the Strait of Hormuz also supported margins, while strong seasonal gasoline demand and relatively tight regional balances provided additional support.
European refinery intake nonetheless recovered in July as maintenance programmes were completed, rising by 319,000 barrels a day from June to 10.05 million barrels a day.
Despite the increase in processing, diesel markets remained tight because of supply disruptions and export restrictions.
Asia Also Feels the Pressure
The impact of the tighter diesel market extended into Asia. Singapore’s gasoil crack spread against Dubai averaged $63.99 a barrel in July, up $20.10 a barrel from June and $45.09 from a year earlier, according to OPEC.
OPEC said the increase was supported by Russia’s diesel export ban and reduced Chinese product exports, tightening global middle-distillate fundamentals and pushing Western distillate prices higher.
Strong arbitrage opportunities toward the Atlantic Basin also supported Asian prices, the report said.
US Market Also Benefits
The tightening diesel market was also reflected in the US. The US Gulf Coast gasoil crack spread against West Texas Intermediate posted the largest monthly gain across the US product barrel in July. OPEC attributed the increase to renewed Middle East tensions, higher US Gulf Coast distillate exports, including shipments to Latin America, and declining supplies from Eastern Europe.
US refinery intake increased by 139,000 barrels a day in July to 17.42 million barrels a day, while the US Gulf Coast refining margin against WTI rose $16.35 a barrel to average $45.70.
Tightness Could Persist Into Third Quarter
OPEC expects the diesel market to remain supported in the near term. Unplanned refinery outages in Eastern Europe are expected to keep product markets tight during the third quarter of 2026, particularly for middle distillates, according to the report.
Seasonal increases in air and road mobility from August through October are also expected to put upward pressure on product crack spreads across Asia, Europe and the US.
At the same time, OPEC expects new refining capacity to eventually provide some relief. Refinery capacity additions are projected to bring 740,000 barrels a day of new product capacity in 2026, following 995,000 barrels a day of additions in 2025. The additional volumes are expected to improve product balances, particularly from the fourth quarter of 2026 and into 2027.
For now, however, the combination of Russian diesel export restrictions, refinery outages, low inventories and seasonal demand is keeping the global diesel market unusually tight and supporting higher refining margins.
