For the Quarter Ending June 2025
North America
• The Diesel Price Index averaged USD 3.6/Gal,DEL Washington during Q2 2025, down 2% from Q1 2025, indicating a mixed trend influenced by first-quarter oversupply and fourth-quarter geopolitical tensions.
• Diesel Price weakened during April and May as Brent crude declined, with high refinery production and sufficient domestic supplies, with May at the lowest retail levels since 2021.
• In June, Diesel Price Index shot up sharply as crude rose on Middle East turmoil, tight supplies, and rising U.S. diesel exports to Europe and Latin America.
• Why did the price change in July 2025? The Diesel Price Forecast indicates a likely increase in July, driven by continued geopolitical tensions, tight U.S. diesel inventories, robust summer freight demand, and firm export pull from Latin America and Europe.
• Diesel Production Cost Trend rose in June on the back of higher crude and freight costs, though was relatively flat earlier in the quarter due to refinery efficiency and moderated feedstock values.
• Diesel Demand Outlook remained resilient in June amid strong logistics and agricultural pull, but is projected to soften in July due to reduced fertilizer demand and slower freight activity.
• U.S. diesel exports hit a 44-week high in June, supporting global demand, but internal market pressure remains subdued due to long-term fuel efficiency trends and modal freight shifts.
• Despite June's tight supply, Q2 supply remained broadly balanced as elevated refinery utilization (94.7%) and stock drawdowns were offset by declining diesel imports earlier in the quarter.
South America
• The Diesel Price Index in Brazil averaged BRL 5.96/ltr ,FD Rio de Janeiro, showing a 3% decline from Q1 2025, driven by weaker global crude benchmarks, stable domestic output, and strategic price cuts by Petrobras.
• Diesel Price trended downward through Q2 as Petrobras implemented three consecutive reductions, reflecting a drop in Brent crude, improved local refining output, and abundant imports from Russia.
• Why did the price change in July 2025? The Diesel Price Forecast indicates further decline due to weaker seasonal demand, higher biodiesel blending targets, and distributors offloading fossil diesel stock ahead of August’s B15 mandate.
• Diesel Production Cost Trend remained manageable, aided by operational refinery stability, lack of port disruptions, and smooth logistics across Santos and Paranaguá.
• Diesel Demand Outlook softened due to early monsoon weather, reduced agricultural fuel use, and decelerating industrial activity, despite Brazil’s long-term infrastructure needs.
• Brazil’s growing focus on biofuel integration and decarbonization encouraged inventory realignment, further easing fossil diesel demand in June.
• Imports from Russia remained strong despite EU sanctions, with discounted cargoes and smooth transshipment boosting local supply.
• Domestic inflation and fuel cost moderation offered relief to freight, logistics, and public transport sectors, improving price pass-through visibility.
China
• The Diesel Price Index in China averaged USD 950/MT (Ex-Beijing, June) during Q2 2025, reflecting an overall incline, despite a 2.5% decline compared to Q1 2025, driven by shifting refinery behavior, fluctuating crude costs, and mixed demand trends.
• Diesel Price gains in June were supported by early-month crude oil volatility amid Middle East tensions, while April and May saw downward adjustments due to oversupply and weakened manufacturing consumption.
• Why did the price change in July 2025? The Diesel Price Forecast for July signals a decrease, as agricultural demand eases post-harvest, refinery output remains elevated, and international crude benchmarks stabilize at lower levels, undermining cost support.
• The Diesel Production Cost Trend stayed moderate across Q2, with June seeing marginal increases tied to higher crude procurement costs, especially for early-month refinery intakes during peak volatility.
• Diesel Demand Outlook in China remained mixed: construction and logistics provided baseline support, but growing EV and LNG fleet penetration, industrial slowdown, and high inventories capped consumption growth across Q2.
• Domestic refineries, including teapot operators in Shandong, raised throughput in April and June, boosting diesel availability, while export volumes surged—over 700,000 MT in April alone—though export margins narrowed.
• Despite stable port operations and no major logistical bottlenecks in Q2, the domestic market saw limited pricing power due to cautious downstream buying and fuel substitution trends.
• Overall, the Q2 Diesel Price Index uptrend was narrowly maintained by early June’s bullish cues, though structural weaknesses and muted demand are forecasted to pressure prices in July 2025.
Europe
• Diesel Price Index showed a mixed Q2 trend, ending lower than Q1 due to late-June price correction after Middle East ceasefire.
• Why did the price of Diesel change in July 2025? Early July 2025 expected decrease, as risk premiums fade, imports stabilize, and speculative buying eases.
• Diesel Production Cost Trend: Rose early Q2 with crude spike, then declined as Brent fell post-ceasefire; refining margins briefly surged.
• Diesel Demand Outlook: Seasonal peak in jet, marine, and transport supported demand, but not enough to hold high prices into July.
• European refiners benefited early from wide cracks, but late-Q2 margin compression reduced gains amid lower diesel premiums.
• Diesel supply pressure eased in late Q2 as Middle East cargoes resumed, reducing tightness from early-quarter disruptions.
• EU’s proposed ban on diesel from Russian-origin crude (via third countries) adds long-term uncertainty but no short-term impact.
For the Quarter Ending March 2025
North America
Diesel prices in the USA followed a largely upward trend during Q1 2025, with prices closing higher compared to the previous quarter despite some fluctuations in March. In January, prices rose due to increased heating fuel demand driven by winter storm Enzo and strong domestic consumption.
However, warmer weather forecasts later in the month softened demand, overall market sentiment remained firm, supported by reduced inventories and refinery constraints. February saw a further price increase as cold temperatures in the Northeast intensified heating oil usage, and maintenance at key refineries tightened domestic supply. Strong diesel exports, particularly to Europe and South America, also contributed to reduced availability in the domestic market.
However, March witnessed a shift, with prices declining due to reduced industrial activity, weaker export prospects, and uncertainty from new U.S. tariffs on Canadian energy imports. Despite this softening, the overall quarterly price level remained elevated, largely driven by strong early-quarter demand, supply challenges, and global geopolitical influences. Compared to Q4 2024, diesel prices in Q1 2025 were higher by 3%, reflecting continued cost pressures across the U.S. fuel market.
APAC
Diesel prices in the APAC region showed a mixed but largely stable trend in Q1 2025. In January, prices rose in China, supported by a surge in international crude oil prices due to OPEC+ production cuts, geopolitical tensions in the Middle East, and stronger global demand expectations from winter cold waves. However, domestic diesel demand remained weak, tempering price gains. February saw prices inch slightly higher as post-holiday industrial and mining activities resumed, and pre-Spring Festival stockpiling supported demand. Supply constraints due to reduced refinery operations in Shandong and sustained diesel exports further bolstered prices.
In March, the trend reversed, and diesel prices declined twice due to falling global crude prices, eased geopolitical concerns, and signs of increased oil output from April. Domestic demand remained moderate, and refinery operating rates stayed stable, leading to inventory accumulation and softer pricing. Despite seasonal recovery in agriculture and construction, weak industrial and logistics activity limited demand. Overall, diesel prices in APAC remained relatively flat in Q1 2025, slipping 0.1% from the previous quarter.
Europe
In Q1 2025, diesel prices in Europe showed a mixed trend, with slight increases in certain sectors but underlying downward pressures. Diesel prices for used cars saw a marginal rise, up by 1.0%, driven by a slight increase in demand for used diesel vehicles. However, broader market trends pointed to potential price declines due to falling imports into Europe despite ample global supply. Diesel imports into core European regions dropped by 5% compared to Q1 2024, partly due to the reduction in refining capacity, including the permanent shutdown of the Gunvor Rotterdam refinery and closures in Wesseling and Grangemouth. These capacity losses were expected to tighten supply, making Europe more reliant on imports from other regions, such as the Middle East.
Seasonal demand also had mixed effects: colder weather in parts of Europe supported heating oil demand, but a warmer-than-expected winter dampened this impact. Furthermore, tariffs on Canadian diesel exports to the U.S. were implemented in March 2025, which could indirectly affect European diesel markets by altering supply dynamics. Additionally, the growing competition from electric vehicles continued to limit demand for diesel in the passenger vehicle sector. Despite these challenges, overall diesel prices remained relatively stable, as supply disruptions and a shift in refining capacity balanced out the downward pressures.
South America
Diesel prices in South America, particularly in Brazil, showed a fluctuating but overall declining trend in Q1 2025. In January, prices rose after Petrobras, the state-run oil company, implemented its first diesel price hike since late 2023, aligning domestic prices with international benchmarks. This move was influenced by global market conditions and inflationary concerns. February saw another 5% increase in prices due to continued pricing adjustments by Petrobras and state tax hikes. However, March brought a sharp turnaround, with prices falling significantly as domestic supply improved and imports dropped nearly 40%. Petrobras ramped up local diesel production, while Russia and Saudi Arabia remained key suppliers. The commissioning of new production assets further supported local availability. Despite stable demand from agriculture and logistics, the market saw weak support for elevated prices due to improved supply and competitive domestic rates. By the end of March, the downward momentum in prices outweighed earlier hikes, leading to an overall quarterly decline of 4.4% compared to Q4 2024.
For the Quarter Ending December 2024
North America
In Q4 2024, diesel prices in the United States followed a declining trend, primarily due to increased supply and a mild economic slowdown. October saw a slight incline in diesel prices, but by November, prices dropped as refinery operations ramped up following maintenance shutdowns.
The return of refineries to full production levels helped alleviate supply constraints, driving prices lower. Additionally, a warmer-than-expected start to the winter season dampened heating oil demand, contributing to a reduction in prices. By December, the downward trend continued, as inventories grew and demand for diesel softened due to factors like a less severe winter and lower domestic consumption. Although certain regions, like California, saw slight price increases, overall, the national average saw a notable decrease of about 7.0% from the previous year.
The rise in distillate inventories and robust refinery output helped support the market, despite regional variations in demand. In summary, the combination of stronger supply, milder seasonal demand, and increased exports to Europe resulted in a general decline in diesel prices across the U.S. throughout Q4 2024. Specifically in the U.S., the market experienced a 4% decrease from the previous quarter.
APAC
In Q4 2024, the diesel market in China experienced an overall declining price trend, primarily driven by weak domestic demand and reduced industrial activity. October saw an initial upward movement in diesel prices due to a combination of tightening fuel supply and declining refining output. Refiners reduced their runs due to weak refining margins, and China’s refining throughput continued to decrease year-on-year for the sixth consecutive month. This reduction in domestic supply was further compounded by lower crude oil imports, which created some pressure on the market. However, this price increase was somewhat moderated by the weak overall demand stemming from China’s broader economic slowdown and the shift towards new energy vehicles and LNG as alternatives to diesel.
By November, the diesel market started to experience a decline as demand continued to weaken, especially in sectors like agriculture and construction. The seasonal reduction in agricultural activity and outdoor projects, along with a slowdown in industrial operations, dampened consumption. Refineries responded by lowering prices to stimulate sales, and cautious procurement behavior from traders further suppressed price increases.
In December, the declining trend persisted as demand remained subdued, especially in northern China, where colder weather led to a further reduction in diesel consumption. Refineries maintained a steady supply but faced challenges from weak domestic demand, leading to continued price reductions. Diesel exports provided some support, but overall market conditions remained weak, further contributing to the downward price movement for the month. Thus, the quarter concluded with a continued decline in diesel prices across the region. In China, the market saw a 2% decline from the previous quarter.
Europe
In Q4 2024, the European diesel market exhibited a mixed price trend influenced by a range of economic and supply-side factors. Economic headwinds, primarily driven by the ongoing inflationary environment and central bank tightening, dampened demand across Europe. Major economies like Germany and France saw notable declines in diesel consumption, reflecting broader structural challenges and the economic slowdown. Additionally, the transition to electric and hybrid vehicles continued to impact the demand for diesel, as fewer diesel-powered passenger vehicles were registered.
At the same time, diesel refining margins in Europe saw a significant decline, falling to levels considerably lower than in previous years. This downward trend in refining margins was driven by a combination of reduced demand and higher operational costs, particularly in the face of rising energy prices and inflationary pressures.
On the supply side, anticipated refinery closures in the region added uncertainty. While these closures, including major refineries in the UK and Germany, were expected to reduce refining capacity, their immediate impact on the market was tempered by the ability of Europe to absorb external diesel supplies, including from the US Gulf Coast. US diesel exports to Europe were notably higher, helping to stabilize the supply side despite the weakening domestic demand.
The outlook for European diesel prices remains mixed. The closure of refineries and ongoing shifts in global supply chains, including developments in Russia and the Middle East, are likely to have an impact on diesel pricing in the medium term. However, the structural decline in demand for diesel, driven by the energy transition and weaker economic conditions, is expected to keep downward pressure on prices in the near term.
South America
In Q4 2024, diesel prices in Brazil saw a consistent upward trend, driven by a mix of supply challenges, strong demand, and global market fluctuations. October experienced price stability despite volatility in international markets. While global diesel prices, including those in the U.S. Gulf Coast, declined, Brazil’s diesel prices remained steady due to high imports and robust demand, particularly from the agricultural sector during the corn harvest. Diesel imports reached a two-year high, with Russia being the main supplier, though the market saw pressure from a seasonal dip in demand and high inventories at ports.
In November, diesel prices saw a slight increase, reflecting stable supply-demand dynamics and Petrobras’ market interventions. The depreciation of the Brazilian real contributed to rising import costs, though the expansion of domestic refining capacity helped to maintain a balance. By December, diesel prices experienced a more significant rise due to increased costs for imports, fueled by fluctuations in the exchange rate. The price gap between imported and domestic diesel widened, particularly at ports like Santos and Itaqui. Despite higher production levels, Brazil's reliance on imports continued, driving prices up for the quarter. Overall, the market experienced a 1% increase from the previous quarter.
For the Quarter Ending September 2024
North America
During Q3 2024, diesel prices in North America experienced a notable decline, reaching multi-year lows amid broader economic concerns. U.S. diesel prices averaged the lowest level in two years. Contributing factors included a seasonal slowdown in demand, particularly from the transportation and industrial sectors, as economic indicators suggested a potential recession and weaker manufacturing activity. Additionally, the market faced increased domestic diesel production and higher imports, further saturating supply.
Inventory dynamics also played a crucial role; crude oil stockpiles fell by 1.6 million barrels barrels, while distillate inventories saw a modest increase of 100,000 barrels, indicating tighter supply conditions. Meanwhile, U.S. crude oil prices declined, with futures dropping reflecting the impact of reduced demand and economic uncertainties. Although the Organization of the Petroleum Exporting Countries (OPEC+) planned to increase production, challenges such as Libya’s supply disruptions and the anticipated output cuts from Iraq added uncertainty to the market. As schools resumed and the transition to winter fuels approached, expectations of continued downward pressure on diesel prices persisted.
Specifically in the U.S., the market experienced a 4% decrease from the previous quarter, with the quarter-ending price settling at USD 3.56/Gal for Diesel Del-Washington. Overall, the combination of reduced demand and fluctuating inventories characterized the bearish market conditions throughout the quarter.
APAC
During Q3 2024, the APAC region witnessed a decline in diesel prices, driven by several interrelated factors affecting supply and demand dynamics. In China, the diesel market faced significant headwinds, with demand decreasing due to high temperatures, frequent rainfall, and a general summer slowdown in industrial activities. This led to cautious purchasing behavior among traders and end-users, resulting in a buildup of inventories and further downward pressure on prices. Additionally, the country’s transition toward alternative fuels, such as natural gas, and a substantial drop in diesel consumption over 10% year-on-year reflected broader economic challenges, including a property crisis and slowing growth. Refinery output also suffered, with Sinopec reporting a 0.5% decline in domestic refined oil consumption. Despite an increase in crude oil production, overall refined product sales fell, contributing to market weakness. Throughout the region, the volatility of global oil prices remained a concern, exacerbated by geopolitical tensions in the Middle East and economic uncertainties. Consequently, prices continued to decline, indicating a bearish market environment. The combination of weak demand, high inventories, and structural shifts toward cleaner fuels highlighted the challenges facing the APAC diesel market during the quarter. In China, the market saw a 3% decline from the previous quarter, with the quarter-ending price for diesel settling at USD 945 per metric ton in Beijing.
South America
During Q3 2024, diesel prices in South America remained stable, influenced by a combination of steady demand and consistent supply dynamics. In Brazil, the market benefited from a resilient economy, with key sectors such as agriculture, manufacturing, and transportation maintaining robust diesel consumption. Despite rising global crude oil prices, driven by optimistic economic forecasts and geopolitical tensions, the local market exhibited stability as consumption patterns remained predictable. Supply-side factors also contributed, with Petrobras investing heavily in energy infrastructure to enhance diesel production, thereby securing domestic fuel needs. Additionally, balanced import-export activities helped stabilize prices, with Brazil successfully sourcing alternative supplies amidst a decline in Russian diesel shipments. Throughout September, Brazil imported significant volumes of diesel to meet the demands of the upcoming corn harvest, further underpinning market stability. While external market fluctuations and geopolitical events posed challenges, Brazil's strategic position as a key importer and its strong domestic production capabilities ensured that diesel prices remained stable during this quarter, fostering a favorable business environment. In Brazil, the market experienced a 1% increase from the previous quarter, with the quarter-ending price for diesel reaching BRL 5.93 per liter, Min in FD Rio de Janeiro. Overall, the region navigated a balanced market situation, reflecting a sustained equilibrium between supply and demand.
Europe
In Q3 2024, diesel prices in Europe were shaped by a complex interplay of factors, including significant increases in petroleum product exports and high refinery production levels. The rise in exports led to a regional oversupply, which exerted downward pressure on diesel prices. Notably, despite robust exports, many European countries, particularly Germany, experienced a decline in demand, with consumption falling below historical averages. The influx of diesel from global suppliers contributed to substantial increases in fuel inventories, particularly in major ports like Amsterdam-Rotterdam-Antwerp, where stock levels were markedly higher than the previous year. This accumulation of supplies occurred alongside maintenance activities at key refineries, which created localized supply challenges. While Kazakhstan recorded the lowest diesel prices in the region, several Western European countries, including Norway and the UK, saw significantly higher rates. The overall market dynamics were characterized by weak demand in the industrial heartland of Europe, leading to a disconnect between supply and consumption. Additionally, diesel refinery margins weakened considerably, reflecting the challenging market conditions. As traders anticipated potential supply shocks from geopolitical developments, the overall environment for diesel pricing remained volatile, with refinery operators grappling with the impacts of high inventories and fluctuating demand.
FAQs – Global Diesel Market Q2 2025
Why did U.S. diesel prices rise in June 2025?
Prices rose due to Middle East tensions, tight inventories, and strong export demand.
What is the Diesel Price Forecast for China in July 2025?
A decrease is expected as post-harvest demand drops and refinery output stays high.
Why did diesel prices fall in Brazil during Q2 2025?
Due to Petrobras’ price cuts, strong Russian imports, and weaker demand.
Will European diesel prices fall in July 2025?
Yes, as ceasefire eased supply concerns and speculative buying reduced.
