Pump prices could remain high in Europe, adding to inflationary pressure. The immediate problem is not just the supply or price of crude oil, but limited refining capacity, disrupted trade flows and shortages of finished fuels, particularly diesel.
The prospect of peace between Iran and the US has sent oil prices sharply higher and lower in recent months. Brent crude, the international benchmark, has traded between about $73 and $126 a barrel since the end of February and was around $95 on Friday.
ADVERTISEMENT
ADVERTISEMENT
European fuel prices have followed these movements. But petrol and diesel have remained particularly expensive because their prices also reflect the cost and availability of refining—not only the price of crude oil.
Although electric cars account for a growing share of new registrations, petrol and diesel still power almost nine in 10 passenger cars on EU roads. According to ACEA’s latest fleet data, 49.2% run on petrol and 38.4% on diesel, giving the two fuels a combined share of 87.6%.
Some European governments have temporarily reduced fuel taxes or introduced other support measures since the energy shock began, although the response has varied by country. Even so, petrol and diesel prices remain close to their historical highs.
In the week beginning 31 August, petrol averaged €1.95 a litre across the EU, about 4% below its June 2022 peak of €2.03. Diesel averaged €2.04, around 3% below its record of €2.11 in April 2026.
The figures come from the European Commission’s Weekly Oil Bulletin and include duties and taxes. Its historical series begins in January 2005.
“The key reason for the widening gap between crude and European fuel prices is that this is increasingly a refining and product-supply problem rather than simply a crude-supply problem,” Sumit Ritolia, lead analyst for refining supply and modelling at Kpler, told Euronews Business.
“Crude may be available, but the capacity to convert it into the right products—particularly diesel—has become much tighter,” he added.
Diesel prices also affect households that do not own diesel cars. The fuel powers much of Europe’s road freight, agriculture and construction, meaning sustained price increases can eventually raise the cost of food and other goods.
The latest eurozone inflation data showed that inflation rose to 3.3%, driven mainly by higher energy prices.
Why Europe is short of diesel
European fuel inventories are low, while conflicts in the Middle East and attacks on Russian refineries have disrupted global supplies of refined products.
Following Russia’s full-scale invasion of Ukraine, Europe shifted much of its diesel and jet-fuel sourcing towards the US, India and the Middle East.
“For diesel and jet, Europe is the big importer, so it sets global prices," said Alan Gelder, senior vice-president for refining, chemicals and oil markets at Wood Mackenzie. "Prices are elevated here, but they’re elevated everywhere. It’s just more exacerbated in Europe because we’re the key import location.”
With Middle Eastern and Russian product exports constrained, traditional buyers of Russian diesel, including Turkey and Brazil, are increasingly competing with European buyers for supplies from the US, India and elsewhere. A disruption in one region can therefore tighten supplies globally as trade flows adjust.
Refining margins, which influence pump prices, are at high levels. According to Reuters, Eurobob E5 petrol barges traded at a premium of $62.07 a barrel over Brent futures, only just below the June 2022 record of $62.10.
At the same time, European diesel futures reached a record premium of $78.91 a barrel over Brent futures on Tuesday, before easing to about $77 on Wednesday.
A refining margin measures how much more petrol or diesel is worth than the crude oil used to make it.
A litre bought at a petrol station therefore includes much more than the cost of crude oil. The illustration below uses recent market and EU benchmarks to show how crude, refining, distribution and taxes can combine in a representative litre of petrol. It is an illustration rather than a measured EU-wide price breakdown.
In Europe, refineries are running at high capacity coupled with low inventories. Data from Dutch consultancy Insights Global showed that independently held petrol stocks in the Amsterdam-Rotterdam-Antwerp hub fell to 752,000 tonnes in late August, their lowest level since September 2021, before bouncing back the following week.
Refineries in Europe and the US are already running at high rates. Ritolia said European refinery runs were around their highest levels in three to four years, while US refinery utilisation reached about 98% in the final week of August. This also means that there is little spare refining capacity available to respond to a potential supply disruption.
Gelder also pointed to the approaching autumn maintenance season and the risk of hurricanes disrupting US Gulf Coast refineries. He said strong margins could encourage operators to postpone maintenance, but warned that doing so for too long could create reliability problems and increase the risk of unplanned shutdowns.
How long could fuel prices remain high?
Petrol prices could receive some seasonal relief as summer driving demand fades and the market moves away from more expensive summer-grade fuel, according to Ritolia.
“Diesel does not have the same seasonal release valve, particularly as winter demand and tighter specifications approach, so diesel margins could remain elevated through autumn and into winter,” he said.
Diesel supplies are particularly vulnerable because autumn refinery maintenance can reduce production just as the market switches to winter-grade fuel and heating demand begins to rise.
According to the analysts, higher Chinese diesel exports could provide some relief, although the key question is whether they can be sustained, given China’s tendency to prioritise domestic supply security. Ritolia added that India could supply more fuel to Europe because it has both refining capacity and products available for export.
Even if crude prices fall, that would not necessarily lead immediately to substantially lower pump prices. The principal bottlenecks are currently limited spare refining capacity, shortages of finished products and low inventories.
Both experts said a sustained reopening of the Strait of Hormuz and a recovery in Middle Eastern fuel exports would be important for bringing prices down.
“A continuation of the conflicts just keeps prices ticking up because global demand is still outpacing global supply,” Gelder said. “If things are prolonged, the only way the world comes into balance is if demand is suppressed through even higher prices.”
He said markets could react quickly to a credible political agreement and the restoration of shipping through the Strait.
“If the Strait opens, the crude price would probably drop quite sharply,” Gelder said. “The diesel premium would come down a bit more slowly, but you would see a price drop.”
For European consumers to see meaningful relief, analysts agree that several things would need to happen, including a recovery in Middle Eastern and Russian product exports, continued strong refinery availability, higher exports from alternative suppliers such as India and China, and eventually a rebuilding of inventories.
“Without that, competition for available diesel cargoes is likely to remain strong,” Ritolia said.
